Canadian Dollar Update, May 27, 2020 – Canadian Dollar extends gains
USD/CAD Open: 1.3774-75, Overnight Range: 1.3727-1.3812
WTI Oil is at $33.59 and gold is at $1,689.90. US markets are mixed today.
For today, USD resistance is at 1.3818. Support is at 1.3708.
• Bearish USDCAD technicals fuel losses
• Optimism for a sharp rebound in global economy powers risk sentiment
• EU proposes € 1.1 trillion budget and € 825 billion relief fund
The Canadian dollar is in demand. It is not alone. The commodity currency bloc, Euro, and Sterling added to yesterday’s gains, as a wave of optimism washes over markets. COVID-19 restrictions are being eased or phased out altogether and that has elevated expectations for a global economic recovery.
Asia equity indexes closed with gains, except for those in China. European bourses have surged higher as have S&P 500 futures, which suggests a strong open on Wall Street today. However, beneath the façade of optimism lurks China tensions, and that could turn the risk rally into a risk retreat.
European Union (EU) officials did their part to stoke positive risk sentiment. They are proposing an €825 billion COVID-19 relief fund, composed of loans and grants. There is still a lot of ground to cover as the proposal needs the unanimous agreement of all 27 EU members. Denmark Sweden, Austria and the Netherlands are not on board with the plan. Prior to the announcement, ECB President Christine Lagard warned that EU GDP would fall about 8-12% in 2020.
The Canadian dollar will be vulnerable to an unfavourable ruling for the Huawei CFO while tracking broad US dollar sentiment.
Today’s Suggested Range USD/CAD: 1.3730– 1.3830
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By KBFX | May 27, 2020 | Daily Update | 0 comments