Daily Currency Update

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Trade tensions ease with US

CAD - Canadian Dollar

Less than half a day before Canada was to impose tariffs on US produced goods, US President Donald Trump withdrew his efforts to reimpose aluminum tariffs.

USDCAD might not have jumped at the news but it opened the door to less tension between the two neighbors.

In other news, foreign investors reduced their holdings of Canadian securities by $8.5 billion in July, the second month of decline. Demand for domestic securities and currency demand are directly linked because foreigners must buy the domestic currency to purchase the nation's securities.

Key Movers

UK inflation for the month of August fell by less than expected when consumer prices rose by 0.2%, this was compared to an expected increase of 0.1% and 1% for the month of July. The pound consolidated against the euro and the US dollar yesterday, both trading within very tight ranges as all eyes now turn to the Bank of England and the Federal Reserve.

The Australian dollar continued its upbeat mood on Tuesday opening at 0.7290. Punching through the 73 US cent handle following the latest release of Monetary Policy minutes, intraday highs were seen at 0.7342. The Royal Bank of Australia noted that the current downturn in economic conditions were not as severe as previously forecasted and were maintaining accommodating settings for as long as required. The board also confirmed the cash rate will not be increased till employment levels and inflation are back at their targeted range.

Expected Ranges

EUR/CAD: 1.5579 - 1.564 ▲

GBP/CAD: 1.696 - 1.713 ▼

AUD/CAD: 0.962 - 0.966 ▼

USD/CAD: 1.315 - 1.32 ▲