Canadian Dollar and US Dollar Update August 24, 2015 – Canadian Dollar Getting Crushed
USD/CAD Open: 1.3244-1.3245 Overnight Range: 1.3177-1.3273
The Canadian dollar was rangebound in overnight currency exchange markets. Oil is at $38.93 and gold is at $1,161. US futures are lower. There are no major data releases scheduled for today.
The short term Canadian dollar technicals are neutral. For today, USD resistance is at 1.3113. Support is at 1.3324.
The Canadian dollar’s consolidated trading range of the last few months has broken to the downside over the weekend in response to further uncertainty surrounding the global economy. The Shanghai Composite Index fell a further 8.5%, erasing the 2015 gains made by Chinese equities. The PBOC has not stepped in to artificially buoy the index like they have done in the past, but the possibility of intervention remains. Equities are falling precipitously across the globe, with pre-market trading in US equities showing the Dow, S&P, and Nasdaq all lower. Compounded with last week’s losses, significant market uncertainty is evident.
Oil fell further, now firmly below $40/barrel. Another rate cut in 2015 is becoming increasingly likely, as the BoC has shown to be very sensitive to changes in oil prices. A rate hike by the Fed in September remains possible but is increasingly unlikely as global uncertainty continues to erode US equities. In the absence of Canadian domestic data, the Canadian dollar will continue to follow global sentiment and commodity prices directionally.
Things are getting pretty ugly for the Canadian dollar as commodities and global equities are getting hurt. The Bank of Canada is probably getting nervous as oil prices continue to fall.
Today’s Suggested Range USD/CAD: 1.3200 – 1.3300
Rahim Madhavji | Knightsbridge Foreign Exchange | Toll-Free: 1-877-355-5239
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By Admin | August 24, 2015 | Daily Update | 0 comments