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Canadian Dollar Update, March 26, 2020 – Canadian Dollar rebounds

USD/CAD Open: 1.4162-66, Overnight Range: 1.4066-1.4275

Oil is at $23.46 and gold is at $1,658.30. US markets are higher today.

For today, USD resistance is at 1.4237. Support is at 1.3985.

• Canadian dollar rises with improved risk sentiment
• Canadian unemployment claims could reach 4 million
• G-20 conference call today

The Canadian dollar started the Toronto session on a firm footing after rising steadily overnight.

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FX traders sold US dollars against the major G-10 currencies as positive risk sentiment rippled across asset classes.

The positive sentiment is a direct result of the recent fiscal and monetary actions of the G-7.

The United States is in the process of passing the most extensive economic stimulus package in history, spending upwards of $2.0 trillion dollars.

The cash-strapped Canadian Government answered the bell, announcing an $82.0 billion stimulus program.

The European Central Bank fired a €750 billion quantitative easing bazooka, while the governments of Australia and New Zealand announced stimulus packages of their own.

The cumulative effect of the announcements fueled a rebound in global stock markets and the unwinding of US dollar safe-haven trades. The greenback has been sliding lower since Monday and continued to do so overnight.

The effect of the COVID-19 outbreak on the economy will be underscored this morning with the release of the weekly US jobless claims data. The weekly result has been in the 210,000-240,000 area for the past year.

Today’s report is expected to show a steep rise in claims with the consensus forecast at 1.0 million.

Global equity markets ignored yesterday’s Wall Street action. The major Asia indexes closed with losses. The Nikkei 225 index dropped 4.5% while European indexes are trading in negative territory ahead of the US jobless claims data.

It is far too early to suggest that financial markets are returning to normal, especially since many of the world’s major population centers are in some sort of lockdown. FX liquidity continues to be poor, which helps to explain the wide trading ranges in the Canadian dollar, as well as the other majors.

Today’s Suggested Range USD/CAD: 1.4110 – 1.4210

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By KBFX | March 26, 2020 | Daily Update | 0 comments