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Canadian Dollar Update, March 13, 2020 – Canadian Dollar’s wild ride

USD/CAD Open: 1.3924-1.3925, Overnight Range: 1.3781-1.3947

Oil is at $32.62 and gold is at $1,570.00. US markets are higher today.

The short-term USD/CAD technicals are neutral-bearish. For today, USD resistance is at 1.3949. Support is at 1.3799.

The Canadian dollar is trading like a roller coaster without brakes.

The Canadian dollar is suffering from a litany of woes. The government of Canada’s fiscal response to the worsening coronavirus outbreak paled in the face of stimulus packages from Australia, Great Britain and the United States. On March 11, Canada announced it would spend $1.0 billion to help Canadians cope with the coronavirus outbreak.

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The Saudi Arabia/Russia oil price war drove West Texas Intermediate (WTI) oil prices 44% lower than they were last Friday at one point. They recovered but are still down 25%. The Saudis wanted to cut crude production by another 1.5 million barrels per day, to shore up prices. Russia thought the only beneficiaries of such a move would be US shale producers and they balked. That’s when the Saudi decision to go for market share unsettled global financial markets.

The oil price collapsed, and Italy’s rather draconian decision to quarantine most of the country rattled global markets. News of virus outbreaks in Germany, Spain and the UK exacerbated the angst and led to the cancellation of major sporting events and the banning of large gatherings.

Equity traders were spooked.

Wall Street suffered its most significant loss since the 2008 financial crisis dropping nearly 10.0% in a single day, Thursday. Fed Chair Jerome Powell rode to the rescue. In what some analysts are calling Quantitative Easing lV (QE4), the Fed injected $1.5 trillion of liquidity into the Treasury market.

The news appealed to European traders, and their main indexes have rebounded around 7.0% today.

Meanwhile, the US dollar opened on a mixed note, compared to yesterday’s closing levels but is substantially higher since last Friday’s close.

Today’s Suggested Range USD/CAD: 1.3870 – 1.3970

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By KBFX | March 13, 2020 | Daily Update | 0 comments