Canadian Dollar Update, August 18, 2020 – Canadian Dollar climbs and Finance Minister resigns
USD/CAD Open: 1.3158-62, Overnight Range: 1.3152-1.3231
WTI Oil is at $42.73 and gold is at $2,012.60. US markets are mixed today.
For today, USD resistance is at 1.3204. Support is at 1.3162.
• USDCAD traders ignore news of Finance Minister resignation
• Thin, summer markets exaggerate FX moves
• US dollar falls steadily overnight and opens in Toronto with losses against the G-10 majors
The Canadian dollar shrugged off domestic political drama and extended yesterday’s gains. Finance Minister Bill Morneau’s resignation did not surprise very many people. He was rumoured to be the Liberal Party’s sacrificial lamb in an effort to shift the media focus from Prime Minister Trudeau’s involvement in the WE Charity scandal.
USDCAD traders ignored the news. Instead, they focused on the US dollar, which saw continued selling pressure. The greenback retreated in Asia and Europe and opened in Toronto with losses across the board.
EURUSD continues to flirt with major technical resistance at 1.1909, which if broken, suggests further gains to 1.2000. So far, it is holding. That may be due, in part, because of a resurgence of COVID-19 cases in the Eurozone. Germany reported 1,693 new cases yesterday, the largest number since April. EURUSD traders are keeping an eye geopolitical tensions as well. Turkey is antagonizing Greece, and Russia is warning the EU to not interfere in Belarus.
GBPUSD rallied to 1.3191 from 1.3104, underpinned by a media report suggesting the EU would ease some of its demands about the UK treatment of tax breaks and state subsidies, which has been hampering trade negotiations.
The Reserve Bank of Australia minutes were released overnight. The minutes confirmed the central bank’s bias that it didn’t need to ease policy rates any further. That was expected, but AUDUSD rallied anyway supported by broad US dollar selling.
US Housing Starts and Building Permits data is available today.
Today’s Suggested Range USD/CAD: 1.3110 – 1.3210