Home Daily Commentaries CAD slips as Delta concerns continue

CAD slips as Delta concerns continue

Daily Currency Update

CAD - Canadian DollarDemand for the Canadian dollar dipped against the safe-haven US dollar as concerns over the effect of the Delta variant’s spread continued to cloud the global outlook for recovery. USDCAD was up 0.28%, trading at 1.2626 at the time of writing. Market expectations that the US Federal Reserve will set a timeline for tapering this week have decreased due to the resurgence in COVID-19 cases. Lockdowns and reduced economic activity across varying regions are likely to remain a drag on growth through the rest of 2021 and into 2022. We maintain our view that risks remain broadly skewed to the downside through the near-term as shifting sentiments steer direction.This week’s focus is on the Kansas City Fed’s Jackson Hole Symposium which begins Thursday and a keynote speech from Federal Reserve Chair Jerome Powell on Friday.

Key Movers

The release of the German Ifo index signalled a loss of momentum for Germany in the second half of the year. The Ifo index dropped for the second month in a row in August and came in at 99.4. Earlier in the week, we saw a decline in Germany’s PMI data and at the beginning of the month, the ZEW survey showed a sharp decline in sentiment. According to the reports, Germany’s economy is recovering, however concerns of a fourth COVID-19 wave remain which could limit any EUR gains. EURUSD was down 0.03%, trading at 1.7513 at the time of writing. Economists have expressed concern that the UK's post-lockdown rebound has been running out of steam during the summer months, owing to a string of underwhelming economic data releases. With no high impact UK data releases on Wednesday, market focus continued to be on COVID-19 figures. And should they continue to rise, it could leave the pound vulnerable to losses. GBPUSD was down 0.02%, trading at 1.3725 at the time of writing.

Expected Ranges

  • EUR/CAD: 1.4795 - 1.4844 ▲
  • GBP/CAD: 1.7283 - 1.7339 ▲
  • AUD/CAD: 0.9121 - 0.9174 ▲
  • USD/CAD: 1.289 - 1.2636 ▲