Canadian Dollar Update, March 30, 2020 – Canadian Dollar getting pummeled
USD/CAD Open: 1.4084-88, Overnight Range: 1.4011-1.4183
Oil is at $20.06 and gold is at $1,648.30. US markets are higher today.
For today, USD resistance is at 1.4227. Support is at 1.4104.
• Canadian dollar extends overnight losses in early Toronto trading on oil price woes
• Trump suggests COVID-19 measures will be in place to end of April
• Month-end portfolio rebalancing flows may underpin US dollar.
The Canadian dollar started the Toronto session on the defensive and continued to back-track in early trading. It is an entirely different story than what was seen on Friday when USDCAD jumped to 1.4150 from 1.4050. That move was sparked by a surprise rate cut by the Bank of Canada. They slashed the benchmark overnight rate to 0.25% from 0.75% and announced a Quantitative Easing (QE) program. The BoC said the move was necessary because “The spread of COVID-19 is having serious consequences for Canadians and for the economy, as is the abrupt decline in world oil prices.” The QE program was necessary to “alleviate strain in short-term funding markets” and in the Government of Canada debt market.
USDCAD closed the week at 1.3988 but the reality of plunging oil prices quickly led to buying at the Asia open. The Canadian government’s perceived anti-oilsands policies, a shortage of pipeline capacity combined with the slowing global demand due to COVID-19, is weighing on prices.
The Canadian dollar, like the rest of the major currencies, is also suffering from renewed coronavirus fears. President Trump said that federal guidelines suggesting social-distancing will stay in place at least until the end of April, which dashed hopes for an early end to the crisis. Traders were also unnerved by news Italy’s death toll from the virus crossed the 10,000 threshold.
The Canadian dollar will track broad USD dollar moves today with traders watching equities for direction.
Today’s Suggested Range USD/CAD: 1.4130 – 1.4230
Get Started With Knightsbridge Foreign Exchange
Book Foreign Exchange Rate
By KBFX | March 30, 2020 | Daily Update | 0 comments