Canadian Dollar Update, March 11, 2020 – Canadian Dollar underwater
USD/CAD Open: 1.3726-1.3727, Overnight Range: 1.3681-1.3754
Oil is at $33.57 and gold is at $1,659.80. US markets are lower today.
The short-term USD/CAD technicals are neutral-bearish. For today, USD resistance is at 1.3779. Support is at 1.3692.
The Canadian dollar is underwater, although not as deep as it was yesterday. USDCAD spiked to 1.3795 from 1.3635 yesterday due to a wave of US dollar demand against the major G-10 currencies. Trump’s plan to eliminate payroll taxes for the rest of the year, and promises to provide support for hourly workers, airlines and the cruise industry fueled demand for US equities and improved the US economic growth outlook.
The Canadian dollar also suffered from the steep plunge in oil prices. Saudi Arabia is so unhappy with Russia’s refusal to agree to the Kingdom’s oil production cut plan, they started a market share war, by slashing prices for crude. West Texas Intermediate dropped from $46.10/barrel on Friday to $27.33 on Monday. Prices have recovered, but the gains have been meager. The American Petroleum Institute (API) said that US crude inventories rose 6.4 million barrels in the week ending March 6, which weighed on prices overnight.
Coronavirus fears spurred the Bank of England to action. The BoE slashed the Bank Rate to 0.25% from 0.50% They took action because “risky asset and commodity prices have fallen sharply, and government bond yields reached all-time lows, consistent with a marked deterioration in risk appetite and in the outlooks for global and UK growth. Indicators of financial market uncertainty have reached extreme levels.” GBPUSD traded erratically following the news, dropping to 1.2834 before spiking to 1.2953.
The Canadian dollar opened with a small gain compared to yesterday’s close but has since deteriorated in early trading. Today’s price action will be determined by Wall Street equity moves, oil price action and Trudeau’s stimulus plan. There are not any notable economic reports on tap.
Today’s Suggested Range USD/CAD: 1.3680 – 1.3780
Get Started With Knightsbridge Foreign Exchange
By KBFX | March 11, 2020 | Daily Update | 0 comments