Home » Daily Commentaries » The Loonie trades downwards after the U.S. Senate passed a bill in support of Hong Kong’s anti-government protestors.

The Loonie trades downwards after the U.S. Senate passed a bill in support of Hong Kong’s anti-government protestors.

Wednesday 20 November, 2019

Daily Currency Update

CAD - Canadian DollarAfter weeks of having the Loonie sidelined by global uncertainty, the Loonie got hit in overnight trading as market participants grew concerned of deteriorating relations and the ability to finalize the "phase one" trade deal between the U.S. and China following the U.S. Senate passing a bill in support of Hong Kong’s anti-government protesters. However, the Loonie got a bit of help from local CPI numbers. According to Statistics Canada, the CPI month to month came in at 0.3, which aligned with the forecast consensus. On a year-over-year basis, the CPI rose 1.9 percent in October, matching the increase in August and in September. Excluding gasoline, the CPI rose 2.3 percent following three consecutive monthly increases of 2.4 percent. The USD/CAD initially fell from 1.3314 towards an intraday low of 1.3277 (stronger Loonie) driven by the CPI, but then, it touched a new intraday high of 1.3326 (weaker Loonie) when the North American equity markets started to sell-off.

Key Movers

Moves among major currencies were largely muted throughout Tuesday with both the USD and Euro trading flat on the day. Sterling edged lower through trade overnight and today as investors checked expectations as the December 12 election looms ever nearer. Recent polls show the incumbent Conservatives hold a relatively comfortable lead over its primary opposition. Rivals bolstering expectations Johnson will be able to win a majority and force his withdrawal agreement through the House of Commons, allowing the UK to exit the EU on January 31. While sterling still looks cheap much of the upside that would come from a Johnson victory has already been priced in with investors wary of extending gains significantly beyond 1.30 in the short term.

Expected Ranges

  • USD/CAD: 1.3280 - 1.3333 ▲
  • EUR/CAD: 1.4718 - 1.4760 ▲
  • GBP/CAD: 1.7132 - 1.7273 ▲
  • AUD/CAD: 0.9018 - 0.9081 ▲
  • NZD/CAD: 0.8505 - 0.8578 ▲