Daily Currency Update
CAD - Canadian DollarThe USD/CAD pair is not one of the most volatile major FX pairs, and amid the lack of local economic news, it trades sideways. However, crude oil, one of the most important commodities that drives the Canadian economy, has started to negatively influence the Loonie as of a few minutes ago. The USD/CAD has risen a few pips towards 1.3325 (weaker Loonie) after crude oil inventories were released. The weekly report published by the U.S. Energy Information Administration (EIA) revealed that commercial crude oil inventories in the U.S. increased by 2.9 million barrels in the week ending on October 4th, compared to an estimate for a build of 1.4 million barrels by analysts. Crude oil erased some early gains and pushed the Loonie lower. Technically speaking, the USD/CAD has a solid resistance level at around 1.3350 (CAD/USD 0.7491). If that level is broken, the following levels would be 1.3367, the 1.3400 handle, and 1.3419. On the flip side, important support levels are 1.3284 and 1.3269.
Key Movers
The U.S. dollar kept a bid amid concerns that U.S.-China tensions were growing at the beginning of this week. The Trump administration is still moving ahead with discussions around possible restrictions on portfolio flows into China, with a particular focus on investments made by U.S. government retirement funds, according to Bloomberg. Furthermore, the U.S. decided to add eight Chinese companies to its trade blacklist, which affects China's ambitions and threatens companies' access to crucial components and relationships with U.S. firms.Prime Minister Boris Johnson accused the European Union of adopting a harder position, and European Council President Donald Tusk accused Johnson of playing a blame game. A call between Johnson and German Chancellor Angela Merkel Tuesday sent the sterling plunging after Johnson said reaching a deal is now "essentially impossible." The new IMF chief, Kristalina Georgieva said governments may have to coordinate a fiscal-stimulus response. She added, "the global economy is now in a synchronized slowdown." She cited uncertainty from global trade friction, geopolitical tensions, and Brexit. She also warned that it could "last a generation" with possible shifts such as broken supply chains and isolated trade.
Expected Ranges
- USD/CAD: 1.3285 - 1.3334 ▲
- EUR/CAD: 1.4590 - 1.4655 ▲
- GBP/CAD: 1.6252 - 1.6505 ▲
- AUD/CAD: 0.8912 - 0.8991 ▼
- NZD/CAD: 0.8340 - 0.8420 ▼