Home Daily Commentaries The Loonie awaits the release of the Fed announcement

The Loonie awaits the release of the Fed announcement

Daily Currency Update

CAD - Canadian DollarThe USD/CAD is falling 0.19 percent (stronger Loonie) this morning, helped by GDP numbers. According to Statistics Canada, real gross domestic product was up for a third consecutive month in May, rising 0.2 percent. The increase was led by a rebound in manufacturing with 13 out of 20 industrial sectors expanding. On a three-month rolling average basis, real gross domestic product increased 0.7 percent. The GDP year to year came in at 1.4 percent versus the expectation for 1.3 percent. This news is helping the Loonie to gain strength before the Fed announcement at 2:00 pm. As mentioned yesterday, technically speaking, the USD/CAD pair looks poised to test the 1.3000 handle, which is still a short-term target for the Loonie bulls. Furthermore, there is resistance at 1.3144 and 1.3190. On the other side, there is strong support at 1.3098 and 1.3069.

Key Movers

The AUD/USD pair climbed for the first time in nine sessions as traders covered short positions after second-quarter inflation data beat estimates. Still, gains were muted by lingering U.S.- China trade tensions. The AUD/USD pair touched the 0.6900 handle in the overnight trading session, and it is trading at 0.6884 at the time of this writing, representing a 0.17 percent increase. China and the U.S. have finished a new round of trade talks in Shanghai, following almost three months of no talking; however, there is no evidence of progress. The two governments may release statements later today. Furthermore, the atmosphere may have been soured by Trump's "rip off" tweet. The People's Daily (the biggest newspaper group in China) reacted with a commentary saying China won't make concessions against its principles on trade. Bloomberg Economics forecasts that for every one percentage point increase in the prospect of the U.K. crashing out of the E.U. without a deal, the British Pound will fall 0.2 percent. If no-deal risk dropped to zero, Bloomberg Economics sees a gain of 9 percent. The U.K. Prime Minister Boris Johnson has set out his stall and doesn't intend to back down from his demand that the European Union renegotiate the current Brexit deal that Parliament has rejected. He has the back of his cabinet colleagues, but he is consistently turned down by the E.U.

Expected Ranges

  • USD/CAD: 1.3023 - 1.3219 ▼
  • EUR/CAD: 1.4542 - 1.4670 ▼
  • GBP/CAD: 1.5960 - 1.6147 ▲
  • AUD/CAD: 0.8969 - 0.9074 ▲
  • NZD/CAD: 0.8629 - 0.8707 ▼