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Canadian Dollar Update, May 21, 2020 – Canadian Dollar consolidating gains

USD/CAD Open: 1.3925-29, Overnight Range: 1.3891-1.3946

WTI Oil is at $34.33 and gold is at $1,726.70. US markets are lower today.

For today, USD resistance is at 1.3959. Support is at 1.3855.

• Surging crude prices underpinning Canadian dollar
• Global risk sentiment turns negative as Trump/China dispute heats up
• Weekly US jobless claims in focus

The Canadian dollar is consolidating this week’s gains. Surging West Texas Intermediate (WTI) oil prices, which have risen 33% since last Thursday, are offsetting, to a degree, the latest shift to negative global risk sentiment.

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Trump’s tweets and comments did not help risk sentiment in Asia. Traders were already concerned after US equity indexes closed with losses. Asia followed Wall Street’s lead and the major equity indexes closed in the red. S&P futures are suggesting a negative open for Wall Street today.

Traders are looking ahead to this morning’s US weekly jobless claims data. The forecast is for an increase of 2.4 million, which is high but better than last week’s nearly 3.0 million result. Better than expected results should lead to renewed buying of the so-called risk assets, which includes the Canadian dollar.

Yesterday, Bank of Canada Deputy Governor Timothy Lane warned that Canada would emerge from the coronavirus crisis in a weaker position than before. He said supply and demand would be soft due to lower consumer confidence, and inflation would remain depressed.

European and UK Manufacturing PMI reports were better than the previous releases but still showed that deep contractions in their respective economies. The news was expected and did not have any negative impact on EURUSD or GBPUSD.

There are not any Canadian economic reports of note, available today.

Today’s Suggested Range USD/CAD: 1.3880– 1.3980

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By KBFX | May 21, 2020 | Daily Update | 0 comments