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Canadian dollar Benefits from Risk on Appetite

Monday 17 October, 2022

Daily Currency Update

The Canadian dollar made gains against its US counterpart today as news of the US Treasury Department starting talks with primary dealers to begin buying back some of the older debt to help ease the dysfunction in the market. We are seeing US equity market rally on the news, which in turn as the US dollar slipping against its G7 counterparts and the Canadian dollar is benefiting the moves. BOC releases its Business Survey results today at 10:30 am. Business confidence gauge allows market participants to analyze optimistic or pessimistic views of the economic situation in the short term. Senior Deputy Governor Carolyn Rogers to speak at 4pm today: Her comments on the economy and her policy outlook could impact the Canadian dollar’s performance against it trading peers. This is ahead of the Bank of Canada’s interest rate decision next week on Wednesday.

Key Movers

On Friday in the United States market sentiment remained dampened. US economic data showed that consumer spending is weakening, as demonstrated by September’s Retail Sales coming at 0% MoM, below estimates, and August’s 0.3%. Annually based sales slowed by 8.41% YOY, while the University of Michigan Sentiment edged higher to 59.8, exceeding estimates, though inflation expectations for one year heightened to 5.1%, up from August’s 4.7%. The higher rates backdrop saw renewed USD strength and equity market weakness. The S&P500 was down 2.4% and the NASDAQ just over 3% on Friday, both effectively reversing their surprising rallies after the US CPI data from the previous day. It’s likely to be another volatile week offshore this week. US earnings season starts to kick into gear with Bank of America, Netflix, and Tesla among the companies reporting this week.

Expected Ranges

  • EUR/CAD: 1.3435 - 1.3509 ▼
  • GBP/CAD: 1.5521 - 1.5696 ▲
  • AUD/CAD: 0.8608 - 0.8649 ▲
  • USD/CAD: 1.3704 - 1.388 ▼