The Loonie awaits the release of Canadian GDP numbers and the Fed announcement from the U.S tomorrow
Tuesday 30 July, 2019
Daily Currency UpdateCAD - Canadian DollarThe Loonie is weakening this morning versus the Aussie dollar, Kiwi dollar, and the Euro. Additionally, the USD/CAD pair is bouncing towards the 1.3200 handle (weaker Loonie), trading at 1.3185 at the time of this writing. There are still no economic data from Canada until tomorrow, where Canada's economy is expected to nearly halt in May on weakness in wholesale and retail sales. An increase of 0.1 percent in May is expected for Canada’s GDP, following gains of 0.3 percent in April and 0.5 percent in March. Technically speaking, the USD/CAD pair has not tested the 1.3000 handle, which still a short-term target for the Loonie bulls; however, the USD/CAD pair is still trading in a long-term uptrend. In the short-term, a significant resistance is 1.3195 and then 1.3219. On the other side, an important support is 1.3150; however, a stronger support is at 1.3098. The volatility is very contracted today, but with the Fed announcement and Canadian GDP numbers tomorrow, we should expect more significant movements by the end of the trading session on Wednesday.
Key MoversCurrency market participants are pricing in a no-deal Brexit scenario. The GBP/USD pair dropped towards 1.2119 on Tuesday, extending Monday's decline. The pair has fallen 2.1 percent so far this week, and it is trading at 1.2175 at the time of this writing. Furthermore, market participants are pricing a more than 60 percent chance of a 25 basis point rate cut by December based on the concern that the U.K. may leave the European Union without a deal. According to JPMorgan, British policymakers might lower their growth outlook and abandon raising rates when they announce their decision and release their inflation report later this week. Trump again criticized the Fed for hiking rates too early and by too much. He also mentioned that quantitative tightening was a big mistake. Additionally, the Bank of Japan trimmed its growth outlook for the year through March to 0.7 from 0.8 percent, saying it wouldn't wait to ease if it thinks risks to its price target are increasing.
- USD/CAD: 1.3144 - 1.3219 ▲
- EUR/CAD: 1.4670 - 1.4709 ▼
- GBP/CAD: 1.5965 - 1.6062 ▼