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FX Daily Update

Published 08/25/2015, 08:45 AM
Updated 05/14/2017, 06:45 AM

International markets suffered a ferocious selloff Monday morning. The S&P 500 briefly fell 5.3% yesterday before rallying to end the day down 3.9%. China was largely blamed for the market meltdown. Xinhua, the country’s official news agency, even referred to the turmoil as “Black Monday.” In order to address the situation and ease lending criteria, Beijing cut its key rate this morning by 25 bps.

The uncertainty surrounding the global economy also continues to undermine crude oil prices. According to an analysis by our Chief Economist and Strategist, based on demand, the price of Brent crude oil could fall to $35 a barrel should the economic deterioration continue.

The worst of the storm is behind us with stock indexes up this morning. However, rest assured, the loonie will remain volatile in the days and weeks to come and we could revisit a USD/CAD level of 1.33, last seen in 2004.

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