Canadian Dollar Update, March 24, 2021 – Canadian Dollar Hurt by Poor Risk Sentiment
USD/CAD Open: 1.2567-71, Overnight Range: 1.2567-1.2607, Previous Close: 1.2588
WTI Oil is at $60.18 and gold is at $1,730.10. US markets are higher today.
For today, USD resistance is at 1.2603. Support is at 1.2507.
• Upside surprise for Eurozone Composite PMI data
• Oil prices bounce on news Suez Canal is blocked
• US dollar continues to grind out gains and opens higher
The Canadian dollar traded choppily in a nervous FX session. USDCAD closed at 1.2588 yesterday and bounced within 0.0020 points on either side of that level overnight. The price action was driven by oil price swings and broad US dollar sentiment.
Equity traders were nervous. Wall Street closed in negative territory, and Asia equity indexes did the same, led by a 2.03% drop in Japan’s Nikkei 225 index. The proximity to Japan’s year-end on March 31 also weighed on Japanese stocks. European indexes are in negative territory while Wall Street futures are modestly higher.
The Canadian dollar clawed back some losses after West Texas Intermediate (WTI) oil bounced to $59.72 from a low of $57.41. Yesterday’s losses were fueled by increased geopolitical tensions and fears that the third-wave coronavirus outbreak in many regions would delay a global economic rebound. The price drop was exacerbated when the American Petroleum Institute reported US crude inventories rose 2.9 million barrels in the previous week.
The sellers became buyers after news that a container ship ran aground in the Suez Canal and effectively blocked the passage. The Suez Canal handles a high volume of oil tanker traffic which is now being delayed.
Fed Chair Jerome Powell and Treasury Secretary Janet Yellen gave Congress an economic update yesterday, and they repeat it today. The duo did not provide any fresh insight into the economic outlook.
EURUSD traded with a negative bias in a 1.1813-1.1853 range and opened in NY in the middle of that band. Prices derived a bit of support from better than expected economic data. March Composite PMI rose to 52.5% (previous 48.8% m/m). German PMI data was also better than predicted.
GBPUSD is choppy in a 1.3676-1.3756 range. UK inflation data missed forecasts, but PMI data was better than expected.
USDJPY traded in a 108.46-108.75 band weighed down by mild safe-haven demand for yen and lowered US Treasury yields.
AUDUSD and NZDUSD ignored data and tracked broad US dollar price action. New Zealand returned to a trade surplus while Australia’s PMI data was better than expected.
The only US data release of note is February Durable Goods Orders.
Today’s Suggested Range USD/CAD: 1.2520 – 1.2620