Canadian dollar update – Friday August 7, 2020. Greenback grinds out gains...NFP ahead.
FX & market recap:
US dollar sellers took a time-out, and dollar buyers took control. It didn’t start that way. Asia FX was steady until Trump checked his polling data and saw “Sleepy Joe” Biden, wide-awake and leading by 9-12% as per YouGov polls, and Ipsos polls. He issued executive orders against two Chinese apps, Tik Tok and WeChat, which the Wall Street Journal says gives a 45-day deadline for an American company to buy them.
On January 29, 2020, President Trump said about the new US, Canada, Mexico trade agreement: “The USMCA is the largest, fairest, most balanced, and modern trade agreement ever achieved. There’s never been anything like it.” A little more than six months later, on August 6, Trump said “Earlier today I signed a proclamation that defends American industry by re-imposing aluminum tariffs on Canada. Canada was taking advantage of us, as usual. The aluminum business was being decimated by Canada, very unfair to our jobs and our great aluminum workers.” Prime Minister Trudeau said, “Canada would respond with dollar-for-dollar retaliatory tariffs.”
Canadian dollar highlights:
USD/CAD dropped to 1.3235 yesterday, just above support in the 1.3230 area. It held and prices bounced to 1.3288 overnight. USD/CAD is punching above its weight. The currency pair is free-loading on the broad-US dollar sell-off. Yesterday’s ADP report was weak, and though a poor barometer of NFP, still raises concerns that Friday’s NFP report may be weaker than expected.
A weak US economy is not helpful for the Canadian outlook, either. The US dollar is suffering from the belief that the European economy will outperform the US economy because of the rise in COVID-19 cases in America. However, the new case numbers are declining. Canada has its version of a political crisis with calls for the Finance Minister to resign. The Alberta oil patch got hit with another blow last week when Total Petroleum, wrote down $9.5 billion in oilsands assets. If they don’t see hope in Canada’s energy industry, who else will bail?
EUR/USD rallied, albeit choppily, in a 1.1839-1.1915 band. It peaked after the German Factory Orders data was released, then profit taking drove prices to the overnight low, which is where they are in early NY trading. EUR/USD has risen on the back of negative US dollar sentiment stemming from US political dysfunction, the resurgence of coronavirus cases in many US states and the perception that the European economy will outperform the US economy in the second half of the year. However, the magnitude of recent gains and the risk of a correction with nonfarm payrolls looming is making traders cautious.
British pound highlights:
GBP/USD was the best performing currency overnight. GBP/USD popped to 1.3284 after the Bank of England announcement, and that is where it sits in early NY trading. Prices were supported when the BoE said that April-June COVID-19 slump was “less severe” than expected. They lowered their 2020 forecast for unemployment from 10.0% to 7.5% and upgraded their 2020 growth forecast to -9.5% from -14%. Officials are still discussing the use of negative rates, but Governor Baily said he “did not think we are about to use negative rates, that is not the current plan.”
Asia Pacific highlights:
USD/JPY traded sideways in a 105.40-68 band. Wednesday’ weak ADP data and soft US Treasury yields weighed on prices. AUD/USD and NZD/USD moves mirror US dollar sentiment. Both currency pairs are lower on the back of profit-taking ahead of Friday’s NFP data, following this week’s strong gains.
Get access to our market experts and sign up to receive the latest updates on any currency with our real-time exchange rate reports.
Sign up to receive the latest market news from our experts.
Who can use the MTFX payment service?
Individuals and businesses who need to send money in foreign currency internationally can use MTFX’s services. The beneficiary of the transfer must have a bank account for the funds to be paid into.
Personal clients usually use our services to transfer money between their own accounts in two different countries.
Business clients usually use our services to transfer funds to suppliers, fund international operations, or repatriate overseas earnings.
Why should I use MTFX and not my own bank?
MTFX offers currency exchange rates that are 2-5% better than those offered by the banks. Personal clients usually save hundreds of dollars per transfer and for larger transfers, the savings can run into the thousands.
We also offer excellent customer service, dedicated currency specialists, and a 24/7 online platform with best-in-class technology that allows you to complete transfers from any device virtually anywhere in the world.
Business customers save with better currency exchange rates and proven solutions geared towards managing and mitigating foreign exchange risk. Our solutions include forward contracts, market orders, rate alert services, and much more - all backed by great technology and great people.
How do customers send funds to MTFX?
Funds can be transferred via wire transfer, Electronic Funds Transfer (EFT), or ACH payment services. MTFX maintains bank accounts in all major currencies with highly-rated banks. Our banking infrastructure ensures that you can transfer funds to us quickly and securely.
How long does it take MTFX to transfer funds?
Our global network of banking partners allows us to get funds to virtually anywhere in the world quickly and efficiently. Most wire transfers from MTFX will be received by your beneficiary within 24-48 hours. MTFX also offers same-day transfers that are almost instantaneous, as well as low-cost in-country payment services for your less urgent transfers. For further information please speak to one of our currency specialists.
MTFX is in the process of migrating our online dealing system to a newer version which offers more functionality along with an updated look and feel. While we complete our migration, both versions of our online dealing platform will be accessible.