Canadian dollar outperformed all its counterparts yesterday as everything about the dollar went in its favour – interest rate hike, encouraging economic data, and higher stock and commodity prices. In the accompanying statement of its rate announcement, Bank of Canada surprised some traders/economists by keeping open the possibility of further near-term rate hikes, while most had expected this would be the last hike of the year. At the end of the day, loonie gained almost a cent against USD, 3/4 cent versus euro, and more than a cent against Swiss franc. USD/CAD closed at 1.0374 or .9639.
Australian dollar was the best performer overnight, benefiting from a better-than-expected employment report, while British pound suffered from disappointing trade balance data. Loonie did well against all majors except the Aussie, and managed to hold firm this morning amid mixed economic data. After gaining almost 2 cents against USD in 2 days, I expect some profit-taking today ahead of tomorrow’s Canadian August Employment Report. Early estimates call for 30,000 new jobs created, and unemployment rate remains unchanged at 8%. Latest trading range, based on $5 million inter-bank spot:
USD/CAD 1.0340-1.0350 EUR/CAD 1.3180-1.3190 CAD/JPY 80.7-81.0 EUR/USD 1.2750-1.2760
