The Loonie trades flat without local economic data
Wednesday 24 July, 2019
Daily Currency UpdateCAD - Canadian DollarThe USD/CAD pair trades slightly weaker at 1.3125 this morning, representing a fall of 0.05 percent (the Loonie is slightly stronger) after the US dollar shot up very early in the trading session. The lack of local data will make the Loonie trade on external factors, such as the US dollar and crude oil, until the release of GDP numbers next week. For instance, according to BNY Mellon, the Loonie has been inching towards a potentially pivotal level, and the BoC’s supportive policy is looking incongruous, despite the US dollar’s recovery over the last three business days. The Loonie has been one of the best-performing currencies against the Greenback this year, having gained 3.7 percent, half of which has materialized since mid-to-late-June, during which time, the US dollar has gained 1.5 percent in trade-weighted terms. Technically speaking, the USD/CAD is trading at a critical resistance level. The next resistance levels are 1.3150, 1.3190, and 1.3219. On the downside, 1.3098 and 1.3069 are two crucial support levels.
Key Moversonomic growth in the Eurozone continued to slow in July, driven by the worst performance in manufacturing in more than six years. The Purchasing Managers’ Index dropped to 51.5 from 52.2 in June. The decline was worse than expected, driven by factory output in Germany and France. German manufacturing continued to look increasingly gloomy, with the Purchasing Managers Index data coming in at the lowest level in seven years at 43.1 when the forecast was at 45.1. In France, the services PMI and manufacturing PMI came in at 52.2 and 50.0 versus the estimates of 52.7 and 51.6, respectively. Therefore, ECB President Mario Draghi might be inclined to appear aggressive and present a package of changes tomorrow. The EUR/USD pair fell around 25 pips to the lowest level, 1.1127, since May 31st. However, it has bounced to 1.1150 at the time of this writing. The Aussie dollar also plunged against all of its G-10 peers. For instance, the AUS/USD pair traded at 0.6987 at the time of this writing, touching a 12 day low at 0.6972 earlier today. The driver was a forecast by an influential Westpac economist, Bill Evans, who said that the next Australian rate cut might happen in October, adding that the RBA will probably lower its benchmark to 0.5 percent by February.
- USD/CAD: 1.3098 - 1.3150 ▼
- EUR/CAD: 1.4621 - 1.4670 ▼
- GBP/CAD: 1.6343 - 1.6465 ▲
- AUD/CAD: 0.9140 - 0.9192 ▼
- NZD/CAD: 0.8785 - 0.8843 ▲