Canadian Dollar Update January 9, 2020 – Canadian Dollar sinks with oil
USD/CAD Open: 1.3039-1.3040, Overnight Range: 1.3026-1.3090
Oil is at $58.83 and gold is at $1,551.30. US markets are higher today.
The short-term USD/CAD technicals are neutral-bullish. For today, USD resistance is at 1.3096. Support is at 1.3040.
The Canadian drifted lower overnight, sinking alongside West Texas Intermediate oil prices. WTI has plunged 9.5% since Tuesday as the threat of a full-scale war between the US and Iran faded.
The US dollar opened in Toronto this morning, with gains against all the major G-10 currencies. The British pound was the biggest loser, and that was because of very dovish comments by Bank of England Governor Mark Carney. He pointed out that they had room to double the £60 billion stimulus package of August 2016, which would equate to a 1.0% rate cut. GBPUSD dropped to 1.3015 from 1.3122. It recovered slightly in Toronto trading.
EURUSD is struggling. Yesterday’s break below support at 1.1130 opened the door to further losses to 1.1060. Weak German economic data including a 2.6% y/y drop in Industrial Production and broad US dollar strength drove prices to 1.1098 from 1.1119.
USDJPY was feisty rising from 109.02 to 109.47 thanks to the rapid unwind of safe-have trades entered on Monday. Demand accelerated alongside a rebound in Japanese stock market prices and a jump in US 10-year Treasury yields to 1.821% from 1.71% on Wednesday.
AUDUSD and NZDUSD retreated under the weight of broad US dollar demand. AUDUSD woes were exacerbated by economic concerns from the wildfires and the Reserve Bank of Australia’s dovish monetary policy. NZDUSD tracked AUDUSD lower.
The Canadian dollar remains under pressure in early Toronto trading. Markets are hoping that the Bank of Canada provides a fresh outlook for the Canadian economy today. With luck, they will explain how the benefits from the US and China’s Phase 1 trade deal will offset slowing domestic economic growth concerns.
Today’s US economic reports will likely have a limited impact on FX markets ahead of tomorrow’s Canadian and US employment data.
Today’s Suggested Range USD/CAD: 1.2990 – 1.3090
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By KBFX | January 9, 2020 | Daily Update | 0 comments