Canadian Dollar Update, April 17, 2020 – Canadian Dollar yo-yo
USD/CAD Open: 1.4098-1.4102, Overnight Range: 1.4004-1.4117
WTI Oil is at $18.21 and gold is at $1,710.70. US markets are higher today.
For today, USD resistance is at 1.4082. Support is at 1.3993.
• Yo-yo price action for Canadian dollar and Antipodean currencies
• President Trump releases guidelines for re-opening US economy
• China’s Q1 2020 GDP lowest in 50 years
• Oil glut continues to sink WTI prices
The Canadian dollar was up and down like a yo-yo overnight and that price action may be repeating in Toronto today.
Global markets are eager to embrace a new “risk-on” environment, and their reaction to President Trump’s US economy re-opening plan supports the claim. Trump’s Guidelines to Opening the US Economy is a three-phase plan which will be directed by state governors. The guidelines call for a 14-day downward trajectory of documented cases or tests before the first phase can begin.
Asia traders jumped aboard the “risk-on” bandwagon after the guidelines were released. The USD dropped against the major G-10 currencies, except the Japanese yen. The major stock indexes soared, led by a 3.15% rise in Japan’s Nikkei 225, while US 10 year Treasury yields jumped to 0.69% from 0.60%. China’s report of a 6.8% decline in Q1 2020 GDP put a damper on the rallies.
The US dollar recovered all of its losses against the Canadian dollar and Antipodean currencies during the European session but has pared some of those gains in early Toronto trading.
Bank of Canada Governor Stephen Poloz testified before the House of Commons Finance Committee yesterday. It is his final appearance as he is retiring in June. The Trudeau governor declined his offer to delay his departure until the end of the coronavirus outbreak. The governor repeated his Wednesday’s monetary policy meeting comments. He said: “We have taken a number of steps to ensure financial institutions have ample liquidity so Canadian businesses and households can continue to have access to credit to meet their basic needs and bridge this difficult period.”
Those steps include enhanced repo facilities, an expanded list of institutions that can access BoC lending a program to buy Canada Mortgage Bonds, a program to buy bankers’ acceptances, and a new Commercial Paper Purchase Program.
Canadian dollar traders ignored the governor’s remarks as the focus is when the governments of the world will begin to relax coronavirus measures.
S&P futures point to a positive open on Wall Street, but depressed crude prices may temper positive risk sentiment.
Today’s Suggested Range USD/CAD: 1.4050 – 1.4150