Canadian Dollar Update, March 3, 2021 – Canadian Dollar Consolidating
USD/CAD Open: 1.2614-18, Overnight Range: 1.2595-1.2642, Previous Close: 1.2637
WTI Oil is at $61.57 and gold is at $1,717.40. US markets are mixed today.
For today, USD resistance is at 1.2648. Support is at 1.2601.
• GBPUSD awaiting budget
• Global equities trade higher on vaccine developments
• US dollar opens on mixed note
The Canadian dollar traded sideways in Asia, rallied in early European trading, then retreated into the New York open. The price action was somewhat noisy due to support from oil price moves, equity index gains, and coronavirus vaccine news offset by higher US Treasury yields. Yesterday’s better than expected GDP report provides some support for the currency.
West Texas Intermediate oil prices closed on a negative note yesterday after the American Petroleum Institute reported crude inventories rose 7.3 million barrels in the week ending February 26. However, rumours that OPEC and Russia will delay scheduled production hikes for April 1, lifted WTI from $59.25/barrel to $61.07/b. The Canadian dollar climbed on the news but has since given back most of the gains.
President Biden promises COVID-19 vaccines for all American’s by May 31.
The news improved global risk sentiment.
Asia equity indexes closed with solid gains led by Hong Kong’s Hang Seng index rising 2.70%. European indexes are higher but off their best levels, while Wall Street equity index futures are higher.
US 10-year Treasury yields are trading at 1.452%, up from the overnight low of 1.398%, which has given the US dollar broad support.
EURUSD traded in a 1.2059-1.2113 range, with the low occurring in early NY trading. Soft Eurozone data and higher Treasury yields fueled selling. The Eurozone economy is vulnerable to a double-dip recession as both Composite and Services PMI readings for February were below the 50 thresholds.
Bundesbank President and ECB Board Member said they must carefully analyze the increase in bond yields and could adjust the pace of PEPP purchases. EURUSD technicals are bearish below 1.2130.
GBPUSD traded in a 1.3938-1.4005 range overnight and is trading very erratically at the time of writing because the UK budget is being tabled. The furlough scheme was extended to the end of September as expected and corporate taxes increased.
USDJPY rallied on the back of higher US treasury yields. The Japanese government extended Tokyo coronavirus measures until March 21.
AUDUSD popped to 0.7837 from 0.7809 after Q4 GDP rose a better than expected 3.1% (forecast 2.5%). The move didn’t last as broad US dollar strength drove prices back to 0.7809 in early NY trading. NZDUSD mirrored AUDUSD moves.
US ISM Services PMI is forecast to be unchanged at 57.7
Today’s Suggested Range USD/CAD: 1.2570 – 1.2670