Canadian Dollar Update, March 14, 2022 – Canadian Dollar Not Seeing the Love

USD/CAD Open: 1.2750-54,  Overnight Range: 1.2732-1.2788,  Previous Close: 1.2747

WTI Oil is at $102.58 and gold is at $1,956.50. US markets are lower today.

For today, USD resistance is at 1.2862. Support is at 1.2748.

• Risk sentiment improves with talk of peace talk progress
• New, massive COVID outbreak in China
• US dollar opens lower compared to Friday’s close

The Canadian dollar is not seeing the love.

Oil prices are still above $100/barrel and at a 14-year peak.  The Bank of Canada has kicked off a new monetary policy tightening cycle with one rate hike completed and another five or six more in the cards.  Canada has recouped all the lost jobs since the coronavirus pandemic struck in March 2020.  All the above should have fueled a broad Canadian dollar rally, but instead, the Loonie is as popular as a warm beer on a hot day.

Friday, Statistics Canada announced that employment gained 336,600 jobs in February, well above the forecast for a 160,000 increase.  The removal of most Omicron restrictions accounted for the gain.  It was a relatively strong report, with full-time jobs rising 121,500, helping to drive the unemployment rate down to 5.5% , below its pre-Covid level.

West Texas Intermediate oil prices dropped from Friday’s close in NY today, mainly due to profit-taking, sparked by reports of progress in the Ukraine and Russia peace talks.  Those talks may be hitting speed bumps as a headline reports that the Kremlin says all its plans for Ukraine will be fulfilled as planned.

Russia also denied asking China for military assistance in a rebuttal to UK Security Advisor Jake Sullivan’s comments.  Mr Sullivan said, “We are also watching closely to see the extent to which China actually does provide any form of support, material support or economic support, to Russia.”

The coronavirus reared its ugly head in Shenzhen, China.  China, as usual, appear to be overreacting to rising but still low cases of COVID-19.  Authorities issued stay-at-home orders for the city of 17.3 million, cancelled public transportation, and closed restaurants and public venues for a minimum of a week.

The news crushed mainland stock markets, with the Shenzhen CSI 300 index losing 3.06%.

The Canadian dollar is keeping a close eye on the price action of the US S&P 500 index.  A rising index suggests positive risk sentiment, which supports Canadian dollar gains, while falling prices undermine the Loonie.

S&P 500 futures climbed from 4202 at Friday’s close to 4252 in Europe just as the NY session started.  Prices have since dropped to 4212 after the latest comments from the Kremlin and USDCAD rose from 1.2744 to 1.2770.

There are not any US or Canadian economic reports today.

Today’s Suggested Range USD/CAD: 1.2750 – 1.2850