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Canada to have snap election

Daily Currency Update

CAD - Canadian DollarDemand for the Canadian dollar moved lower against its US counterpart after Prime Minister Justin Trudeau called a snap election for September 20. USDCAD was up 0.44%, trading at 1.2566 at the time of writing. The Canadian dollar was also tracking lower on the back of disappointing economic data from China, which dented stocks across the board this morning. Last week, the Canadian government announced it would require all federal workers and all employees in some federally regulated industries (airlines, railways and others) to be fully vaccinated.

Key Movers

COVID-19 concerns remain a big talking point in the UK especially since restrictions were eased over the past couple of months. Despite relatively high case numbers, the mortality and hospitalization rate is much lower than in the winter. As 75% of the population is fully vaccinated, and many now have protection after having the virus, it seems further restrictions will be kept at bay for now. GBPUSD was down 0.12%, trading at 1.3848 at the time of writing. With harsher lockdowns extended over the weekend in Australia, a strong focus in the market this week will be the economic impact of the Delta variant. AUDUSD was down 0.61%, trading at 0.7324 at the time of writing.US inflation is likely to be in the headlines over the next couple of weeks with the Federal Open Market Committee (FOMC) meeting minutes expected on Wednesday and the Jackson Hole Economic Symposium next week. Markets are split as to whether we will see any change in language from the Federal Reserve Chairman. Despite the high, possibly temporary rate of inflation, the labor market is still recovering, and Friday’s University of Michigan Consumer Sentiment number may not have gone unnoticed. It came in at 70.2, its lowest reading since December 2011 and even worse than April last year. Respondents to the survey highlighted the Delta variant being of particular concern for economic outlook.The US dollar could rally this week if minutes of the Federal Reserve’s latest policy meeting confirm that a shift on tapering of quantitative easing is likely.

Expected Ranges

  • EUR/CAD: 1.4759 - 1.4805 ▲
  • GBP/CAD: 1.7352 - 1.7418 ▲
  • AUD/CAD: 0.9197 - 0.9226 ▼
  • USD/CAD: 1.2513 - 1.2575 ▲