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Canadian Dollar Update, March 10, 2020 – Canadian Dollar stimulated

USD/CAD Open: 1.3698-1.3699, Overnight Range: 1.3609-1.3796

Oil is at $33.48 and gold is at $1,659.80. US markets are higher today.

The short-term USD/CAD technicals are neutral-bearish. For today, USD resistance is at 1.3829. Support is at 1.3719.

The Canadian dollar outperformed its G-10 major currency peers in overnight trading, thanks to President Trump’s stimulus plans. Mr. Trump is expected to announce measures to alleviate some of the impacts to hourly workers from the coronavirus. The US is not acting alone. The governments of Australia, Japan, Italy, and even Germany have announced various plans to help their citizens. Italy said it would suspend mortgage payments and placed travel restrictions across the entire country.

Signs that the coronavirus can be beaten gave financial markets some support. Chinese President Xi Jinping visited Wuhan, which was ground zero for the outbreak. His visit coincided with the announcement of the closure of all temporary hospitals in that area. Apple said that 38 of its 42 Chinese retail stores have reopened.

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Beleaguered oil traders took solace from the news and West Texas Intermediate prices jumped nearly 11%. Russia’s oil minister said that they hadn’t excluded new joint measures with OPEC, which also supported prices. However, gains were capped when Saudi Aramco said its crude shipments would rise to 12.3 million barrels per day in April.

The jump in oil prices provided some support to the Canadian dollar, even though at current levels, prices are decimating the domestic oil industry and suggest negative Q1 2020 GDP growth.

The US dollar opened in Toronto, with gains across the major G-10 currency spectrum, except against the Canadian dollar. USDJPY soared over 2.0% following news of Trump’s stimulus plans and the improved coronavirus outlook for China. USDJPY was also supported by a surge in 10-year US Treasury yields which climbed from 0.32% to 0.72%.

Global stock market indexes recouped some losses. Japan’s Nikkei 225 climbed 0.85%. European equity indexes are on a tear, led by the UK FTSE 100 Index rising 3.5%.

However, the gain is just a drop in the bucket as the FTSE 100 is still down 17% in the past month. Nevertheless, the European stock market rally has driven US equity futures higher. The Dow Jones Industrial Average is poised to rise 1,100 points at the open. It sounds great, but the gain is still less than half of what it lost yesterday.

US stimulus chatter, Wall Street price action and oil price movements are the focus today. There are not any economic reports of note on tap.

Today’s Suggested Range USD/CAD: 1.3650 – 1.3750

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By KBFX | March 10, 2020 | Daily Update | 0 comments