Daily Currency Update
CAD - Canadian DollarThe only "domestic" driver for the Loonie last week was Governor Poloz's speech, who said that the trend in the jobs market has been positive with more evidence of wages increasing. He added that global indicators seem to be bottoming. Market participants have been anxious to hear if Poloz will downplay the lousy job numbers released two weeks ago, but they are also following the news from the U.K. election and the phase-one trade deal between U.S. and China. The Loonie lost 1 percent versus the Greenback last week. Poloz also announced he would step down in 2020 without saying who will replace him.This week's main economic events will be Canadian CPI numbers on Wednesday and then Fridays Retail Sales figures. WTI Crude hit $60 a barrel for the first time since September on Friday. The U.S. oil futures benchmark was lifted last week by the signing of a partial trade deal between the U.S. and China, as well as a surprisingly deep round of output cuts by the Organisation of Petroleum Exporting Countries (OPEC) and its allies.
Key Movers
Boris Johnson's Brexit election gamble paid off spectacularly last Friday as the U.K. Conservative Party secured a crushing victory. They won their most significant majority in Westminster since 1987, while the U.K. Labour Party posted their worst performance since 1935, which led Jeremy Corbyn to state that he would not lead Labour into the next General Election. The GBP rallied immediately after the exit polls predicted a vast Conservative majority, reaching the critical 1.35 level, and then closing the week around 1.3350, still a 9-month high. Phase one of the US-China trade deal was announced Friday, and equity markets globally are going green. Market Participants digest the Phase One trade deal, which will nearly double U.S. exports to China over the next two years. Shanghai closed up 0.6 percent and the Euro Stoxx 50 up 0.8 percent, the S&P 500 and Nasdaq futures are pointing 0.4 percent higher, while the Dow is tracking 68 points higher at the open. In the U.K., the FTSE advanced 2% higher for a second session on reduced uncertainty as Prime Minister Boris Johnson eyes a parliament vote before Christmas to "get Brexit done."
Expected Ranges
- USD/CAD: 1.3114 - 1.3188 ▼
- GBP/CAD: 1.7487 - 1.7655 ▼
- EUR/CAD: 1.4613 - 1.4674 ▼
- NZD/CAD: 0.6478 - 0.6507 ▲