Canadian Dollar Advances On U.S. Stimulus Hopes
October 12 2020 - 1:22AM
RTTF2
The Canadian dollar appreciated against its most major
counterparts in the European session on Monday, as sentiment lifted
up after the Trump Administration offered a $1.8 trillion
coronavirus stimulus proposal and polls showed that Democratic
presidential candidate Joe Biden held lead over Donald Trump in the
upcoming Presidential election.
The package included checks to individuals and an extension of
the Paycheck Protection Program and was up from the
administration's previous proposal of $1.6 trillion.
But House Speaker Nancy Pelosi rejected the proposal, saying
that it was insufficient.
With the election just weeks away, investors are pricing in a
Biden victory that could likely result in more stimulus.
The People's Bank of China scrapped a requirement for banks to
hold a reserve of yuan forward contracts.
The central bank move made it cheaper to short the Chinese
currency.
The loonie climbed to 0.9466 against the aussie, from a low of
0.9496 hit at 12:15 am ET. The loonie is likely to find resistance
around the 0.92 area.
The loonie reached 1.5493 against the euro, its highest level
since September 8. Next key resistance for the loonie is likely
seen around the 1.52 level.
Data from Destatis showed that German wholesale prices continued
to decrease in September.
Wholesale prices fell 1.8 percent year-on-year in September but
slower than the 2.2 percent decline posted in August. Prices have
been falling since February.
The Canadian currency recovered to 1.3118 against the greenback
and was steady thereafter. On the upside, immediate resistance for
the loonie is found near the 1.30 level.
In contrast, the loonie held steady against the yen, after
falling to 80.28 at 12:30 am ET. At Friday's close, the pair was
worth 80.49.
Data from the Bank of Japan showed that Japan producer prices
fell 0.2 percent on month in September - missing expectations for a
flat reading following the downwardly revised 0.1 percent increase
in August.
On a yearly basis, producer prices sank 0.8 percent - again shy
of expectations for a loss of 0.5 percent, which would have been
unchanged from the August reading.
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