Canadian Dollar Update, March 29, 2022 – Canadian Dollar Gets a Boost
USD/CAD Open: 1.2487-91, Overnight Range: 1.2484-1.2528, Previous Close: 1.2519
WTI Oil is at $105.99 and gold is at $1,918.60. US markets are higher today.
For today, USD resistance is at 1.2518. Support is at 1.2489.
- Russia/Ukraine cease-fire talks bolster risk sentiment
- Oil prices underpinned ahead of Thursday’s Opec meeting
- US dollar giving back gains, opens on mixed note
The Canadian dollar rode a roller-coaster in the past 24 hours. Yesterday USDCAD soared, rising from 1.2472 just before NY opened and touched 1.2588 around noon. Those gains were fueled by a mix of sliding oil prices, rising Treasury yields, and wobbly equity markets. Sentiment turned positive in the afternoon, helped by reports that Russia and Ukraine would discuss a ceasefire at today’s meeting in Turkey. USDCAD closed at 1.2519, and the currency pair churned in a 1.2481-1.2528 range.
The Canadian dollar story is a global risk sentiment tale, and for now, the sentiment is positive.
Asia equity indexes closed in positive territory, following the lead from Wall Street. The trend continued in Europe. Germany’s DAX index has gained 1.72%, leading the European markets higher. S&P and DJIA futures point to a positive open on Wall Street.
Oil prices traded in a $100.73/b-$107.77/b range, and gold prices are at $1907.70. The US 10-year Treasury yield is sitting at 2.51%.
Just after 7:30 am today, Russia’s Chief negotiator Vladimir Medinsky said the talks were constructive, and it will stop military activity around Kyiv. The news boosted S&P 500 futures, knocked the US dollar lower, and drove gold prices down.
EURUSD rallied from 1.0970 to 1.1057 in NY, hoping for a Russia/Ukraine ceasefire. However, gains may be limited due to the divergent ECB and Fed interest rate outlooks. The EURUSD downtrend from the beginning of February is intact while below 1.1120.
GBPUSD enthusiastically embraced the risk rally, rising from 1.3053 to 1.3114. Further gains may be limited to 1.3150 due to yesterday’s comments by Bank of England Governor Andrew Bailey warning of a significant growth shock from soaring energy costs.
USDJPY is consolidating gains from the rise in the US 10-year Treasury yield. The rally stalled following more verbal intervention from the International Affairs and Finance Ministers, hinting at the possibility of FX intervention. The Bank of Japan made another offer to buy unlimited 10-year JGB’s at 0.25% today.
AUDUSD and NZDUSD rallied with the improved risk sentiment tone. Australia’s 2022/2023 budget forecasts the budget deficit to narrow to AUD78 billion, with GDP rising 3.5% and inflation at 3.0%.
Today’s US data includes JOLTS job openings, S&P/Case-Shiller Home Price Index, and Consumer Confidence.
Today’s Suggested Range USD/CAD: 1.2450 – 1.2550