Today’s Notable Sentiment Shifts

USD – The dollar eased slightly from a near one-month high as global markets firmed somewhat on Tuesday, a day after a risk-off mood dominated by solvency uncertainty of China’s Evergrande, while investors awaited the results of the Federal Reserve’s two-day policy meeting.

CAD – The Canadian dollar rallied on Tuesday as the re-election of Prime Minister Justin Trudeau’s Liberals reassured investors that the outlook for the economy would continue to improve.

Explaining the implications of Trudeau’s re-election, Bannockburn stated that “unlike most high-income countries, Canada is unlikely to embark on near-term fiscal consolidation. A policy mix of tighter monetary policy and relatively looser fiscal policy tends to be supportive of the currency.”