AUD/CAD likely to trade between 0.97 and 0.99 for now, says Scotiabank

The AUDCAD is expected to trade between 0.97 and 0.99 level for now, according to a recent report from Scotiabank. Technically, either the AUD or the CAD has been oversold with rising risks of corrections at the moment, particularly if taking into account resurfacing US political controversy.

Canada’s GDP declined 0.1 percent m/m in August following a flat month-on-month growth in July, in part due to maintenance shutdowns in major industries such as Oil & Gas. The market had forecast an increase of 0.1 percent according to a Bloomberg survey. In addition, the nation’s industrial producer price index (IPPI) fell by 0.3 percent in September from a month ago due to a stronger CAD, compared to consensus forecasts of a 0.2 percent rise.

Bank of Canada Governor Stephen Poloz on Tuesday testified before the House of Commons Standing Committee on Finance, reiterating his cautious stance on rate adjustment. Meanwhile, BoC Senior Deputy Governor Carolyn Wilkins said "we think wages will continue to increase".

China’s official manufacturing PMI declined to 51.6 in October from 52.4 a month earlier, missing market expectations of 52.0. A decline in the nation’s factory activity was partly attributable to the continued deleveraging process, casting a shadow on China’s future demand for iron ore. Recently, iron ore prices have slumped as Chinese authorities attempt to improve pollution over winter by forcing steel mill closures and sentiment continues to weaken.

According to Metal Bulletin, the spot price for benchmark 62 percent fines delivered to Qingdao China slid to USD58.52 per tonne yesterday after tumbling 2.2 percent to USD58.75 a tonne on Monday, leaving it at the lowest level since June 23.

While US shale output could keep a lid on crude oil prices over the medium to long-term, market sentiment remains confident as Saudi Arabia and Russia is leaning towards extending output cuts for nine months through the end of 2018. The world’s oil cartel is scheduled to meet officially at its headquarters in Vienna on November 30.

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