Canadian Dollar Update October 30, 2019 – Canadian Dollar traders await MPR
USD/CAD Open: 1.3086-1.3087 Overnight Range: 1.3074-1.3141
Oil is at $55.23 and gold is at $1,495.00. US markets are lower today.
The short-term USD/CAD technicals are neutral-bearish. For today, USD resistance is at 1.3107. Support is at 1.3068.
The Canadian dollar continued to consolidate recent gains in a quiet overnight session. Traders are biding their time until the release of the quarterly Bank of Canada (BoC) Monetary Policy Report (MPR). The BoC is widely expected to leave the overnight range unchanged at 1.75% which if confirmed, should not have much of an impact on trading. The MPR details are more important.
In the July report, the BoC said concerns about the US/China trade war were weighing on growth and investment. Those concerns may have been alleviated, to a degree, with the talk that President Trump and China President Xi Jinping were expected to sign “Phase 1” of a trade agreement at the Asia-Pacific Economic Cooperation (APEC) meeting on November 16-17. Last week’s Business Outlook Survey (BOS) indicated a modest improvement in the domestic outlook. Trade talk developments and the BOS suggest a slightly upbeat MPR.
However, traders are also watching developments in the US. The Federal Open Market Committee (FOMC) meeting is this afternoon, and the FOMC is almost universally expected to cut rates by 0.25%.
Economists and analysts are waiting to see if the FOMC indicates that today’s rate cut is the end of the “mid-cycle adjustment,” or if additional cuts are in the pipeline. Other economists question the necessity of lower US rates, especially as stock markets are at record highs.
The Bank of Japan Policy meeting is tomorrow. Comments from BoJ officials about the need for additional monetary policy easing have raised concerns that new stimulus measures could be announced at Thursday’s meeting.
Great Britain is going to the polls on December 12 and rumours of the pending election underpinned GBPUSD this week. Prices climbed from 1.2808 yesterday to 1.2904 overnight.
AUDUSD shrugged of a somewhat soft inflation report and inched higher. However, gains were capped by reports that China and the US were disagreeing over the amount of China’s agriculture product purchases.
The Bank of Canada statement and MPR release is at 10:00 am EDT, and the FOMC meeting statement follows at 2:00 pm, EDT. There are not any Canadian or US economic reports of note due today.
Today’s Suggested Range USD/CAD: 1.3100 – 1.3200
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