Canadian Dollar Update, March 22, 2021 – Canadian Dollar Halts Slide
USD/CAD Open: 1.2495-99, Overnight Range: 1.2490-1.2532, Previous Close: 1.2503
WTI Oil is at $61.60 and gold is at $1,731.00. US markets are higher today.
For today, USD resistance is at 1.2553. Support is at 1.2449.
• Oil prices rebound
• Big week for Fed and central bank speak
• US dollar gives up overnight gains
The Canadian dollar looked like it was in serious trouble on Friday, but resistance held, and prices have been consolidating since.
FX markets opened in Asia with a bout of risk aversion, which fueled safe-have demand for US dollars. Traders were spooked after Turkey President Recep Erdogan fired Central Bank Governor Naci Agbal. Erdogan was incensed that the Governor hiked interest rates to 19% from 17%, last Thursday. FX traders were unimpressed, and the Turkish lira dropped over 15%.
Traders were also concerned about the latest round of measures to curb the “third-wave” coronavirus outbreak in Europe. France, Germany, and Italy were reimposing restrictions and lockdowns in many areas. The moves were seen as more evidence that a European economic recovery would seriously lag that of the US and UK.
EURUSD traded in a 1.1874 to 1.1910 range as European traders dismissed fears around the latest COVID-19 restrictions, and Turkey issues. There were not any economic releases of note, leaving traders to await remarks from Fed chair Powell Tuesday, and ECB President Christine Lagarde , Thursday. The EURUSD technicals are bearish below 1.1950, looking for a break below the 200 day moving average at 1.1852 to extend losses to 1.1775.
GBPUSD is consolidating in a 1.3800-1.400 range as the euphoria from Britain’s stellar COVID-19 vaccine program wanes.
USDJPY traded in a 108.54-108.95 range with prices weighed down by the retreat in US 10-year Treasury yields. Prices saw a bit of negative pressure from safe-have demand for yen, which has since dissipated.
AUDUSD bounced from its overnight low as safe-haven US dollar demand gets unwound. NZDUSD tracked AUDUSD moves.
USDCAD rallied to 1.2530 which also was the downtrend line from March 5. Prices retreated alongside broad US dollar selling vs the majors, with a bounce in oil prices giving an assist. Crude prices are supported by comments from Saudi Aramco CEO forecasting higher oil demand in 2021.
Canadian Pacific Railway announced plans to buy Kansas City Southern Railway in a $29.0 billion deal, which includes stock and a USD $90.00 / share cash offer. The FX impact will be minimal as CPR plans to borrow about $8.6 billion. The deal still needs regulatory approval.
The US and Canadian data calendars are void of top-tier data.
Today’s Suggested Range USD/CAD: 1.2450 – 1.2550