The Loonie rallies as we await the BoC rate statement at 10:00 am EST.
Wednesday 4 December, 2019
Daily Currency UpdateCAD - Canadian DollarThe Bank of Canada (BoC) is scheduled to announce its latest monetary policy in a few minutes (10:00 am EST). The BoC is expected to leave its benchmark interest rates unchanged at 1.75 percent at their December policy meeting. It is good to know though that the most important issue to follow is the tone in the accompanying policy statement. A small change could undoubtedly move the Loonie in one direction very quickly. For now, the USD/CAD pair falls 0.21 percent, towards 1.3267 after the U.S. and China seem closer to agreeing on the amount of tariffs to be rolled back in a phase-one trade deal, even amid increasing tension. However, the main reason for a stronger Loonie this morning comes from a weaker U.S. dollar (see the U.S. daily commentary for more details).The U.S. dollar continues falling in sync with the negative mood in the FX market. President Trump said from London that he wouldn't sign a deal unless it's a "good deal" and added, "I have no deadline." He told the reporters that they'll find out "pretty soon" whether there'll be a deal, referring to the U.S. - China trade war deal. He also said that in some ways, it's better to wait until after the 2020 election. The U.S. dollar accelerated its sell-off as Trump's comments were reinforced by Commerce Secretary Wilbur Ross, who said the U.S. would go ahead with more tariffs on Chinese goods on Dec. 15th if nothing changes in the next two weeks. He added, "There is always the chance of a breakthrough." The issue did not seem to improve regarding the trade war when the House of Representatives imposed sanctions on Chinese officials over human rights. Crude oil is rising over 2 percent this morning, helping the Loonie to climb as well. The OPEC cartel agreed with prolonged output cuts. Iraq reiterated the curbs should increase by 400,000 barrels a day and said Saudi Arabia supports the move.
Key MoversOvernight, the Australian Q3 GDP missed its target, showing 0.4 percent, while 0.5 percent was being eyed. However, the sting was relieved somewhat with Q2 being revised upwards from 0.5 percent to 0.6 percent. It has been another good start to the day for the British Pound, as next week's general election draws ever closer. At the time of this writing, the GBP/USD pair already broke the 1.3000 level, and it is trading at 1.3094, 0.80 percent higher. It also reached a new high of 1.3110 for a few minutes.
- USD/CAD: 1.3191 - 1.3311 ▼
- EUR/CAD: 1.4602 - 1.4773 ▲
- GBP/CAD: 1.7272 - 1.7417 ▲
- AUD/CAD: 0.9033 - 0.9130 ▲
- NZD/CAD: 0.8637 - 0.8723 ▲