News image

Canadian Dollar Update, April 2, 2020 – Canadian Dollar boosted by oil deal hopes

USD/CAD Open: 1.4112-16, Overnight Range: 1.4078-1.4298

Oil is at $22.11 and gold is at $1,629.30. US markets are higher today.

For today, USD resistance is at 1.4195. Support is at 1.4104.

• Canadian dollar gains alongside WTI oil rally
• President Trump suggests Saudi/Russia oil deal coming in “a few days”
• Weekly US jobless claims expected to surge to 4.8 million

The Canadian dollar inched higher overnight on the back of a jump in West Texas Intermediate (WTI) oil prices. WTI rallied to $22.52/barrel from $20.79 /b after President Trump expressed optimism that Russia and Saudi Arabia would end their crude price war. Trump’s comments took the sting out of the Energy Information Administration’s weekly oil inventory report, released yesterday. The EIA reported inventories increased by 13.88 million barrels in the week ending March 27. Oil traders also found solace from a report that China planned to top up their Strategic Oil Reserves.

Don't Waste Money With Banks.
Get Exchange Rates Up to 2% Better With KnightsbridgeFX

Get An Exchange Quote Now

The 8.3% jump in oil prices injected a dose of optimism into European equity markets, which reversed earlier losses and are positing gains as of mid-day in Europe. US equity futures are in the green, which suggests a positive open on Wall Street today.

However, the positive sentiment will disappear very quickly if the Goldman Sachs forecast that US weekly jobless claims will jump to 11 million, is correct. The number of business closures, layoffs, and size of urban lockdowns reported since last week, means no one should be surprised by a sharp jump in jobless claims. Nevertheless, expectations that US coronavirus cases will continue to climb until mid-April may keep markets on the defensive.

The Canadian dollar gains were in tandem with those of the commodity currency bloc. AUDUSD and NZDUSD managed to hang onto Wednesday’s modest gains, although both currency pairs are weaker than where they started the week.

The lingering impact of Japanese year-end (March 31) positioning held USDJPY to a 107.06-107.56 range overnight. 10-year US Treasury yields traded below last week’s low, falling from 0.627% to 0.577%, which capped topside moves. Price action was also hampered by the presence of sizable option maturities, with strikes in the 107.00 and 107.50 area.

EURUSD traded with a negative bias and is sitting at 1.0909 in Toronto. The single currency is still feeling the effects of yesterday’s PMI data. Euro area and German PMI reports were weaker than expected, while the US ISM Manufacturing PMI was better than forecast. The information serves to underscore the outperformance of the US economy compared to the European Union.

GBPUSD surged, climbing from 1.2376 to 1.2474, underpinned by EURGBP selling. The Sterling outperformance compared to the Euro is because of the aggressive UK government and Bank of England stimulus programs to offset the impact of the coronavirus. European Union officials are struggling to come up with a fiscal stimulus plan.

The Canadian dollar is giving back its overnight gains ahead of this morning jobless claims data but remains underpinned by the rebound in crude prices.

Today’s Suggested Range USD/CAD: 1.4060 – 1.4160

Get Started With Knightsbridge Foreign Exchange

1

Get Your Free Quote

2

Book Foreign Exchange Rate

3

Send Funds

2

3

Step 1 : Get Your Free Quote

You completed 0% of your profile.

First Name *

Last Name *

Address *

City *

Province *

Postal Code *

Phone *

Email *

Occupation *

Date of Birth *

Please provide the reason for buying or selling the currency: *

(Travel, Bills to Pay, Purchase or Sale of Investment, etc.)

Please explain how you first obtain the source of funds being sold: *

(such as: Work Income, Sale of Investment, Gift, Inheritance, etc)

Are you or any close relative a Politically Exposed Foreign Person? *

(Head of State, Member of Senate, House of Commons, or Legistrature, etc)

Yes

No

I confirm I am not transacting on behalf of a third party and I have read and I agree to the Terms and Conditions

By KBFX | April 2, 2020 | Daily Update | 0 comments