Home Daily Commentaries The Loonie trades flat this morning as we await the BoC monetary policy report on Wednesday.

The Loonie trades flat this morning as we await the BoC monetary policy report on Wednesday.

Daily Currency Update

CAD - Canadian DollarThe USD/CAD pair continues to be dominated by sellers (stronger Loonie), who continue betting on a weaker U.S. dollar. Furthermore, the Loonie is helped by a “risk on” environment, where the main equity indexes in North America continue showing strength. For example, the S&P 500 is touching new all time highs this morning based on strong earnings in the North American corporate worlds and progress on the U.S.- China trade deal. American officials said they were “close to finalizing” some parts of a trade agreement and the Chinese news agency Xinhua also pointed to progress being made on trade.For now, the USD/CAD pair appears to have stalled ahead of the Bank of Canada (BoC) interest rate decision; it is trading 0.05 percent higher this morning. Technically speaking, the USD/CAD pair is trading right at the support of a long-term uptrend; however, it is dominated by sellers, who might be able to push it lower towards the following new support levels in today’s trading session: 1.3047; 1.3026; and, 1.3011. On the flip side, some key resistance levels to watch for today are the following: 1.3082; 1.3102; and, 1.3119.

Key Movers

Initially, in overnight trading, the pound was trading 0.16 percent higher against the U.S. dollar due to rumors that French President Emmanuel Macron will agree to a Brexit extension to Jan. 31st, alleviating the risk of the U.K. leaving the European Union without a deal on Oct. 31st. However, at the time of this writing, confirmation has been received, and there was some profit taking in the GBP/USD pair. EU leaders have agreed to extend Brexit until 31 January 2020, meaning that the UK will not leave as planned this Thursday. EU Council President Donald Tusk said it was a "flextension", which means the UK could leave before the deadline if a deal was approved by British Parliament. The British pound’s price action was already showing that the U.K. was highly unlikely to leave the EU by Thursday’s deadline. This situation has helped the Euro as well, which along with the pound, have strengthened against the Greenback over the last two weeks. Looking forward, this week is very important, but pay attention later today when the House of Commons votes on U.K. Prime Minister Boris Johnson’s call for an election on Dec. 12th.Other central bank announcements this week will come from the Bank of Canada, Bank of Japan, and Brazil BCB. The Loonie and the Yen promise some important swings in the FX market, along with the Pound and the U.S. dollar.

Expected Ranges

  • USD/CAD: 1.3041 - 1.3102 ▲
  • EUR/CAD: 1.4422 - 1.4522 ▲
  • GBP/CAD: 1.6712 - 1.6834 ▲
  • AUD/CAD: 0.8884 - 0.8938 ▲
  • NZD/CAD: 0.8252 - 0.8314 ▼