Daily Currency Update
CAD - Canadian DollarThe USD/CAD pair continues to fall to new lows, with the fall of the U.S. dollar index being the main driver. It is trading at 1.3368, representing a fall of 0.20 percent. While there is a lack of local data, the ADP private payrolls in the US came in well below expectations on Friday, coming in at 27,000 versus the expected number of 183,000. This was much lower than the previous amount of 271,000 in April. More locally, the Canadian employment report, which will be released on Friday at 8:30 EST, was highlighted at the latest BoC monetary policy meeting, along with the importance of the labour market. This will be the next major event for the Loonie. Technically speaking, the USD/CAD pair is trading at 1.3370 at the time of this writing and it continues to gain momentum to the downside (stronger Loonie). It might find an intraday support at around 1.3465, as noted yesterday. However, there is a strong long-term support at around 1.3350 - 1.3360. Some key resistance levels for today are 1.3400 and 1.3420.
Key Movers
President Trump and Theresa May met and talked about a "very, very substantial trade deal" with the U.K., saying that even the National Health Service was on the table, to which the Prime Minister pushed back. The president asked to meet Tory leadership contenders Michael Gove and Jeremy Hunt, but was turned down by Boris Johnson. Trump declined to see Labour's Jeremy Corbyn. Trump also killed the hopes of reaching a deal with Mexico before he imposes a 5 percent tariff next week over illegal migration, saying, "We'll probably be talking during the time that the tariffs are on and they're going to be paid." On the flip side, the Mexican president, Andres Manuel Lopez Obrador (AMLO) was more optimistic, expressing hope that a compromise can be struck. According to BofAML, the base case now is that there is no US-China deal by the G20, but Trump will push out the deadline for additional tariffs. It also predicted that the PBOC would follow the Fed with two rates cuts this year and one next year while China GDP’s forecast for next year was lowered to 6 percent from 6.2 percent.
Expected Ranges
- USD/CAD: 1.3363 - 1.3420 ▲
- EUR/CAD: 1.5068 - 1.5118 ▲
- GBP/CAD: 1.6990 - 1.7100 ▲
- AUD/CAD: 0.9346 - 0.9365 ▼
- NZD/CAD: 0.8879 - 0.8928 ▲