Canadian Dollar Update February 5, 2020 – Canadian Dollar sentiment is negative
USD/CAD Open: 1.3276-1.3277, Overnight Range: 1.3262-1.3303
Oil is at $51.45 and gold is at $1,561.80. US markets are higher today.
The short-term USD/CAD technicals are neutral-bearish. For today, USD resistance is at 1.3332. Support is at 1.3259.
The Canadian dollar sentiment is negative. Low oil prices and a dovish Bank of Canada monetary policy outlook have exacerbated losses stemming from coronavirus risk aversion.
Global equity markets have reacted positively to the Peoples Bank of China’s efforts to support its economy. They have injected 1.2 trillion yuan into money markets and have trimmed 7 and 14-day repo rates. Asia’s main equity indexes closed with substantial gains, and European indexes are higher.
US equity futures point to a strong open on Wall Street with positive risk sentiment being fueled by rumours that researchers in China identified to possible drugs to cure the virus. A World Health Organization (WHO) official threw cold water on that sentiment when he said: “there are no known therapeutics.”
Elsewhere, AUDUSD was in the spotlight. Reserve Bank of Australia Governor Philip Lowe suggested that the RBA was not likely to cut interest rates any time soon. He pointed to upticks in employment and inflation as reasons to warrant caution. AUDUSD rallied to 0.6772 from 0.6725, with improved global risk sentiment supporting the gains. The New Zealand dollar underperformed compared to its Antipodean cousin, thanks to a mixed employment report and soft ANZ Commodity price data.
USDJPY traders jumped all over the improved risk tone and accelerated their buying of the currency pair. Prices climbed to 109.71 after being at 108.30 in Asia on Monday. The rally was underpinned by a recovery in 10-year US Treasury yields which were 1.505% on January 31 and 1.635% today.
EURUSD is under pressure from unwinding safe-haven trades and mixed to soft Eurozone data which has led to EURUSD falling from 1.1045 to 1.1016.
Today’s economic reports include Canadian Merchandise Trade data which is expected to rebound after November’s rail-strike slump. The ISM Non-manufacturing report is the main US release.
Today’s Suggested Range USD/CAD: 1.3230 – 1.3330
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By KBFX | February 5, 2020 | Daily Update | 0 comments