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.
USD/CAD traders ignored the news. Instead, they focused on the U.S. dollar, which saw continued selling pressure. The greenback retreated in Asia and Europe and opened in Toronto with losses across the board.
EUR/USD 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-190 cases in the Eurozone. Germany reported 1,693 new cases yesterday, the largest number since April. EUR/USD traders are keeping an eye geopolitical tensions as well. Turkey is antagonizing Greece, and Russia is warning the E.U. to not interfere in Belarus.
GBP/USD rallied to $1.3191 from $1.3104, underpinned by a media report suggesting the E.U. would ease some of its demands about the U.K. 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 AUD/USD rallied anyway supported by broad US dollar selling.
U.S. Housing Starts and Building Permits data is available today.
Rahim Madhavji is the President of KnightsbridgeFX.com, a Canadian currency exchange that provides better rates than the banks to Canadians
