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Financial Markets Daily Summary - July 20, 2018

Core Content Overview

This report provides a summary of interest rates, foreign exchange rates, and cross currency rates in the North American and global financial markets as of July 20, 2018. The data is organized into tables and highlights the current rates, as well as changes from the previous week and four weeks ago.

Interest Rates

North American Rates

The following table shows the interest rates for various terms in Canada and the United States, along with the spread between them:

Key Observations

• Spread Consistency: The spread between Canadian and U.S. rates remains relatively consistent across most terms, with the exception of the 30-year term, where the spread has widened slightly.
• Rate Trends: U.S. rates are generally higher than Canadian rates, reflecting the U.S. Federal Reserve's policy stance and the Canadian Central Bank's more accommodative approach.
• Recent Movements: Rates have shown minimal changes compared to the previous week, indicating a stable market environment.

Foreign Exchange Rates

USD Exchange Rates

The following table shows the U.S. dollar exchange rates against various currencies on July 20, 2018:

Key Observations

• CAD Decline: The Canadian dollar has weakened against the U.S. dollar, with a rate of 0.75586 today, down from 0.75982 a week ago.
• EUR and GBP: The Euro and British pound have also declined against the U.S. dollar, with the Euro at 1.1671 and the GBP at 1.3048.
• JPY and MXN: The Japanese Yen and Mexican Peso have shown slight fluctuations, with the Yen at 112.155 and the Peso at 19.022.
• Commodity Currencies: The U.S. dollar has weakened against the Australian Dollar and the Chinese Yuan, indicating potential shifts in investor sentiment towards commodities.

Cross Currency Rates

The following table provides the cross currency rates for various currencies on July 20, 2018:

Key Observations

• USD Dominance: The U.S. dollar remains the strongest currency, with the highest exchange rates against all other currencies.
• CAD and EUR: The Canadian dollar and Euro have both weakened against the U.S. dollar, with CAD at 0.7559 and EUR at 1.1671.
• GBP and JPY: The British pound and Japanese Yen have shown some stability, with GBP at 1.3048 and JPY at 112.155.

Forward Exchange Rates

The following table provides forward exchange rates for various currencies on July 20, 2018:

Key Observations

• Forward Rates: Forward rates for all currencies show a gradual increase over time, indicating expectations of currency appreciation in the future.
• Stability: The U.S. dollar and Canadian dollar show relatively stable forward rates, while the Euro and UK pound exhibit more pronounced appreciation expectations.

Disclaimer

The information in this report is the property of Royal Bank of Canada and may not be reproduced without express authorization. The data is based on sources considered reliable, but the accuracy and completeness are not guaranteed. This report is for informational purposes only and does not constitute an offer to sell or a solicitation to buy securities.