VBCE Daily Foreign Exchange Update for Wednesday, Oct. 26, 2016

USDCAD spot rate: 1.3357 - 1.3362 (as at 8:24am PST)

Ranges:

Asia:

1.3332

to

1.3360

Europe:

1.3333

to

1.3380

North America:

1.3314

to

1.3377

Technical Support / Resistance:

S2

S1

R1

R2

1.3200

1.3304

1.3397

1.3450

Key Economic Data Releases:

- U.S. services PMI: 54.8 (exp. 52.3 / prev. 52.3)

- U.S. oil inventories: -0.553M (exp. 1.633M / prev. -5.2M)

- U.S. new home sales: 0.593M (exp. 0.60M / prev. 0.575M)

Key Event Calendar:

Date

Canada

U.S.A.

Oct. 27

Oct. 28

Durable goods, pending home sales

GDP Q3, GDP price index, consumer sentiment

The CAD is underperforming on the day so far. Weaker crude prices are weighing on the CAD somewhat even though there has been some focus of late on the apparently weaker correlation between the CAD and crude oil prices. Markets around the word, from stocks to metals and bonds, have slowed to a crawl, revisiting lows in volatility that have stood for 2 years. Muted moves just sent a cross-asset gauge of price swing in equities, rates, currency and commodities to the lowest since 2104. That everything should so quiet at once just before the US election is especially alarming to market watchers who see threats stretching from Washington to Beijing. Investors appear to be coming to terms with the inevitability of the Fed interest rate increase in December, which is now at a 73% chance of a hike by year up, up 10% from a week ago. Meanwhile in the UK, the big question continues to be whether Mark Carney will stay on as governor of the Bank of England after he refused to clarify his position during a Q&A session in the UK parliament yesterday. Currently, the TSX is down 0.46% and the Dow is down 0.04%. EURCAD is up 0.17% trading between 1.4520 and 1.4624. GBPCAD is down 0.29% trading between 1.6229 and 1.6355. JPYCAD is down 0.28% trading between 0.01276 and 0.01286. Gold is down 0.30% trading between $1,267 and $1,276USD/oz., silver is down 0.19% trading between $17.65 and $17.86USD/oz., while oil is up 1.38% trading between $48.91 and $50.08.

Sources: Reuters, Bloomberg, FXStreet, RBC Capital Markets, Bank of Canada, U.S. Federal Reserve, CNBC, Forexlive, CME Group

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The information and opinions contained herein are gathered from sources which are thought to be reliable but the reader should not assume that the information and opinions are official or final. VBCE makes no warranty concerning the accuracy of the information and opinions, and accepts no liability for the consequences of any actions taken on the basis of the information and opinions provided. The content is for general information only and does not constitute in anyway giving financial advice.