U.S. Consumer Confidence came in ahead of expectations yesterday, a fact that was well received by investors and helped inject a little green into our screens! Today is looking to be highly volatile once again for the loonie, as we keep a close eye on July’s Canadian Gross Domestic Product (GDP) data.
Despite a trying economic situation in Europe, the euro is holding its own against the USD and CAD. In recent weeks, the Fed’s hesitation to raise its key rate has helped support the single currency. In the past two months, the inverse correlation between the euro and US 2-year bond yields has been 62.5%, while the relationship has only been 31.3% since the beginning of the year. It is important to keep in mind that since its high point in May 2014, the euro is down 19.2% and many financial institutions have recently boosted their outlook for the euro against the U.S. dollar. These facts notwithstanding, overnight data show negative inflation in Europe weighing on the euro, which is down slightly against the other main currencies. Have a great day! Emmanuel Tessier-Fleury
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