Global investors that believed that China’s Evergrande was a house of cards like Lehmen Brothers are starting to realize that the underlying assets of Evergrande is land whereas Lehmens was just paper assets. The International Monetary Fund announced that China has the capability of handling this crisis without causing any systemic ripple effect. In fact, China Evergrande agreed to settle interest payments on a domestic bond on Wednesday, while the Chinese central bank injected cash into the banking system, temporarily soothing fears of imminent contagion from the debt-laden property developer. Adian stock markets reacted positively, while the spill over impacted western markets.
The Federal Reserve’s interest rate announcement is this morning, do not expect anything new. No rate movement and as long as Covid hangs around they will be slow in hiking rates.
The Canadian dollar is bit stronger, however it will likely move after the Fed announcement, expectations of more strength to the USD.
Currently* Close Range
USDCAD 1.2735 1.2815 1,2725-1.2831
EURCAD 1.4941 1.5023 1.4940-1.5048
GBPCAD 1.7385 1.7504 1.7382-1.7527
*Indicative rates only