Canadian Dollar Update, May 4, 2020 – Canadian Dollar pressure by new trade fears
USD/CAD Open: 1.4101-05, Overnight Range: 1.4051-1.4152
WTI Oil is at $19.35 and gold is at $1,714.30. US markets are lower today.
For today, USD resistance is at 1.4149. Support is at 1.4023.
• Trump warns China that Phase 1 deal could be cancelled
• Positive risk sentiment underpinned by easing of lockdown restrictions
• US Dollar opens in Toronto with gains against the G-10 majors
The Canadian dollar rode the coat-tails of US dollar sentiment in a choppy, but thin overnight session. Holidays in Japan and China greatly reduced liquidity in Asia, which exacerbated US dollar gains at the open.
President Trump appears to be using his 2016 election playbook, with threats of tariffs on China the theme. He described tariffs as “the greatest negotiating tool that we have ever devised that we never use.” Yesterday, he threatened to scrap the US/China Phase 1 Trade deal, unless China follows through and buys $200 million of US products.
EURUSD dropped when Asia opened, and never recovered. A German court will be ruling on the legality of recent ECB actions, which has raised some concerns. Also, prices were depressed due to weak Eurozone April Manufacturing PMI data, which dipped to 33.4 from 33.6 previously. The technical picture is modestly bullish while prices are above 1.0930.
There are not any notable Canadian or US economic reports available today.
Today’s Suggested Range USD/CAD: 1.4050– 1.4150
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