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Global covid cases cause equity decline

Daily Currency Update

CAD - Canadian DollarNew COVID-19 cases in the US and in Europe once again drove headlines, and market sentiment soured on the news.Over the weekend, the US reported its highest daily new COVID-19 cases at 85,000 on Friday. Meanwhile, Spain imposed a national night-time curfew, and Britain placed restrictions on Greater Manchester. The S&P 500 and Nasdaq are down 2% and 1.75%, respectively, and demand for the Canadian dollar followed suit. The CAD is down against most trading pairs.Prime Minister Justin Trudeau said that the government will continue to support Canadians. He announced the expansion of eligibly for the small-business loan program.

Key Movers

The pound continued to hold its gains around the 1.30 handle versus the dollar and 1.10 against the euro as Brexit talks continued. UK Prime Minister Boris Johnson's threat to walk away from talks have not come to fruition and it appears French Prime Minister Emmanuel Macron's stance on fishing rights may be softening. Hopefully, this leads the way to a deal sometime next month. Away from Brexit, Britain continued to struggle with the re-emergence of the pandemic. Covid-19 cases continue to rise in the UK as the second wave continues to take a grip. There were 151 confirmed deaths yesterday bringing the total to 44,886. Economic data is thin in the ground this week from the UK so expect Brexit chatter to dominate the news.The Australian dollar posted a modest recovery last week against the Greenback, aided by positive risk sentiment, ending the week around 0.7130. Local data on Friday we saw the release of Australian preliminary October Commonwealth Bank Manufacturing PMI which came in at 54.2 from 55.4 in the previous month, while Services PMI improved to 53.8 from 50.8 in the month of August. There are no scheduled releases today in Australia.With the US election fast approaching, the market priced in the volatility related to the election. The USD is now likely to be stuck in a holding pattern in the near term, given the risk that the election could be contested.

Expected Ranges

  • EUR/CAD: 1.556 - 1.561 ▼
  • GBP/CAD: 1.712 - 1.722 ▼
  • AUD/CAD: 0.935 - 0.941 ▼
  • USD/CAD: 1.313 - 1.321 ▼