Daily Currency Update
CAD - Canadian DollarThe USD/CAD pair trades at 1.3510 at the time of this writing, representing an increase of almost 0.4 percent (weaker Loonie). The Loonie is losing the most this morning compared with all the major currencies, followed by the British Pound. Some external news has activated the risk-off mood in the equity market and the USD/CAD usually reacts to the upside in that environment. The main reason is Chinese state media signaling that the country has no interest in resuming trade talks with the US as long as the US continues to threaten more tariffs. The next opportunity for both sides to meet and try to arrange an agreement would be in the G20 summit in June. The uncertainty is giving a reason to the Loonie bears to push the USD/CAD to the higher limit of the trading range experienced over the last three weeks (1.3375 to 1.3515). Any breakout above 1.3515 would mean a likely move towards 1.3565, which coincides with the previous high seen on December 31st.
Key Movers
The Chinese Yuan tumbled as tensions between the world's two biggest economies escalated after the Huawei action. The USD/CNH pair touched 6.9490, the highest level since November 2018 in the European session. Other than the inflammatory trade-war headlines, the tiresome issue of Brexit looks set to raise its head again. UK PM Theresa May met with the Tory back bench 1922 Committee yesterday and agreed to set out a timetable for her departure once legislation for her planned withdrawal agreement has been voted on in parliament next month. It seems the ever-resilient May has finally bowed to internal pressure within her party. With May set to leave whether her plan gets through or not, it looks like the Sterling will be depressed by uncertainty over her successor with no candidate having a clear lead in polls. Boris Johnson has already stated he will be standing for the post with other candidates likely to include Home Secretary Sajid Javid, Environment Secretary Michael Gove, and former Brexit Secretary Dominic Raab, all likely to throw their hats in the ring. The GBP/USD just tested a strong support level at 1.2750, which coincides with the rate traded in the first week of January. At the time of this writing, the Cable is trading at 1.2757.
Expected Ranges
- USD/CAD: 1.3466 - 1.3543 ▲
- EUR/CAD: 1.5034 - 1.5065 ▼
- GBP/CAD: 1.7149 - 1.7228 ▼
- AUD/CAD: 0.9261 - 0.9317 ▼
- NZD/CAD: 0.8783 - 0.8821 ▼