Canadian Dollar Update, March 26, 2021 – Canadian Dollar Looking for a Catalyst
USD/CAD Open: 1.2574-78, Overnight Range: 1.2572-1.2608, Previous Close: 1.2615
WTI Oil is at $60.94 and gold is at $1,729.60. US markets are mixed today.
For today, USD resistance is at 1.2622. Support is at 1.2565.
• Global risk sentiment rebounds
• German IFO data better than expected
• US dollar opens lower, but still higher for the week
The Canadian dollar opened with a 0.63% loss against the US dollar for the week.
That is a stellar performance in the context of the Antipodean currencies. The Australian dollar dropped 1.45%, and the New Zealand dollar is poised to end the week as the worst-performing major G-10 currency, losing 2.44%
Stock markets rebounded across the globe. China’s Shanghai Shenzhen CSI 300 led the rally with a 2.27% gain. European bourses are higher, and S&P 500 futures suggest a positive open for Wall Street. Gold prices are trading with a bearish bias after rejecting an early NY rally above $1731.00.
The Canadian dollar is underpinned by steady to firm oil prices and forecasts for even higher prices in the months ahead. WTI oil bounced around in a $57.25-$61.97 range this week. The oil tanker Ever Green that is blocking the Suez Canal is also underpinning prices, although authorities expect to resolve the issue in the next few days.
EURUSD traded quietly in a narrow 1.1768-1.1797 band. Better than expected German IFO data, gave the single currency a lift, but ongoing “third wave” coronavirus outbreak fears capped the topside. EU officials approved export controls for COVID-19 vaccines but did not impose them. ECB policymaker Luis de Guindos predicted a robust second-half economic rebound if a high proportion of the EU population gets vaccinated. His comments were justifiably ignored as the EU vaccination rollout has vastly underperformed compared to the US and UK.
GBPUSD extend yesterday’s gains and rallied to 1.3790. The Bank of England’s Financial Policy Summary (FCP) said “Covid continues to pose challenges for households and businesses.” The currency continues to benefit from Bank of England Chief Economist Andy Haldane’s prediction of consumer fueled “rip-roaring” recovery.
AUDUSD rallied from 0.7579 to 0.7626 despite more hostile actions from China. Beijing announced it was imposing 200% duties on imports of Australian wine.
Other officials confirmed that China also halted some hay imports. China is still irate at the Australian government’s call for a formal inquiry into how the coronavirus occurred.
Today’s US data includes PCE and Michigan Consumer Confidence. There are no Canadian releases.
Today’s Suggested Range USD/CAD: 1.2530 – 1.2630