The loonie soars after Canada maintains rates
Gary Christie July 16, 2020 4:44 AM
The USD/CAD fell under pressure as Canada maintains overnight lending rate
The USD/CAD fell under pressure as Canada maintains overnight lending rate.
New BOC governor Tiff Macklem holds Canada's overnight rate at 0.25% and pledges to hold until a 2% inflation target is achieved. The Bank of Canada does not see inflation reaching the 2% target next year.
The US Dollar was bearish against most of its major pairs on Wednesday with the exception of the CHF.
On the economic data front, the Mortgage Bankers Association's Mortgage Applications increased 5.1% for the week ending July 10th, from +2.2% in the previous week. Empire Manufacturing spiked to 17.2 on month in July (10.0 expected), from -0.2 in June. Industrial Production rose 5.4% on month in June (4.3% expected), from +1.4% in May. The Federal Reserve's Beige Book stated that economic activity increased in most Districts, but remained far below where it was before the COVID-19 pandemic. Employment increased on net in most Districts as numerous businesses reopened and/or increased activity, however payrolls in all Districts were well below pre-COVID levels. Districts also noted a difficulty in bringing back workers due to health and safety concerns, childcare needs and generous unemployment insurance benefits.
On Thursday, Retail Sales Advance for June are expected to release +5.0% on month, from +17.7% in May. Initial Jobless Claims for the week ending July 11th are expected to decline to 1,250K, from 1,314K in the week before. Finally, Continuing Claims for the week ending July 4th are expected to fall to 17,500K, from 18,062K in the prior week.
The Euro was bearish against most of its major pairs with the exception of the CHF. In Europe, the U.K. Office for National Statistics has released June CPI at +0.6% (vs +0.4% on year expected).
The Australian dollar was bullish against most of its major pairs with the exception of the NZD and CAD.
One of the largest currency pair decliners on Wednesday was the USD/CAD which dropped 104 pips to 1.3511. Prices broke below a consolidation range between 1.3537 and 1.3646. Look towards a test of 1.3492 support and 1.34785 in extension.
Source: GAIN Capital, TradingView
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.
Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.
Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.