The Loonie trades flat as it consolidates its gains from last Friday.
Monday 21 October, 2019
Daily Currency UpdateCAD - Canadian DollarThe Loonie had impressive gains on Friday, trading as high as 0.7592 (USD/CAD 1.3171). Oil prices spiked last week after an Iranian oil tanker was engulfed in flames from a suspected missile attack off the coastal city of Jeddah in Saudi Arabia. Furthermore, Canadian Job numbers again added another 54,000 jobs in September, which lowered the unemployment rate to 5.5 percent from 5.7 percent. The USD/CAD pair trades at 1.3227 at the time of this writing.Another positive driver of the Loonie came from the possibilities of a trade deal between the U.S. and China, which brought excitement to financial markets last Friday. China agreed to more than double its annual purchases of U.S. agriculture, while the U.S. agreed to not implement its tariffs increase on Chinese imports on Oct. 15th. However, concessions on intellectual property rights still need to be determined. President Trump said it would take up to five weeks to complete “phase one” of the deal.Steven Mnuchin, US Treasury Secretary, has advised that a new round of tariffs on Chinese goods set for December 15th would be triggered if Beijing fails to finalize the “phase one” deal set by Trump last week. Beijing may send a delegation led by Vice Premier Liu He, China’s top negotiator, to finalize a written deal that could be signed by the presidents at the Asia-Pacific Economic Cooperation summit in mid-November in Chile.
Key MoversThe British Pound erased some of its impressive gains after the European Union’s chief Brexit negotiator, Michel Barnier, said that the U.K.’s proposals for a deal lacked detail. Furthermore, the Prime Minister’s coalition allies, Northern Ireland’s Democratic Unionist Party, also suggested doubts about the plan. And finally, the European negotiators warned that Boris Johnson's Brexit plan isn't good enough to be the basis of a deal. To add more drama, Jean-Claude Juncker said Brussels are expected to approve an extension past the Oct. 31st deadline if London asks for another delay.The IMF continues downgrading its global growth forecast for a fifth straight cut, saying that the world’s largest economies are decelerating as trade tensions are eroding global growth. IMF Chief Economist Gita Gopinath wrote the following in the report, “…with a synchronized slowdown and uncertain recovery, the global outlook remains precarious, ... There is no room for policy mistakes and an urgent need for policy makers to cooperatively de-escalate trade and geopolitical tensions.”
- USD/CAD: 1.3200 - 1.3241 ▲
- EUR/CAD: 1.4528 - 1.4596 ▼
- GBP/CAD: 1.6602 - 1.6906 ▲
- AUD/CAD: 0.8909 - 0.8960 ▼
- NZD/CAD: 0.8240 - 0.8315 ▼