Canadian Dollar Update, November 12, 2020 – Canadian Dollar Drifting Lower
USD/CAD Open: 1.3064-68, Overnight Range: 1.3051-1.3149
WTI Oil is at $42.18 and gold is at $1,877.30. US markets are mixed today.
For today, USD resistance is at 1.3160. Support is at 1.3080.
• Canadian dollar softer on renewed US dollar demand
• US election drama weighs on risk sentiment
• Global equities on the defensive
The Canadian dollar is trading in the middle of its overnight range with the US dollar opening on a mixed note. Japan’s Nikkei 225 index outperformed compared to the other global indexes. The major European bourses are lower led by the French CAC 40 index falling 1.0%, and US equity futures pointing to a negative open on Wall Street.
Gold prices are a tad firmer, while crude oil is down.
Global markets may be getting nervous over US political developments, or lack thereof. Markets may also be disconcerted by the reports of another 135,428 new US COVID-19 cases reported yesterday. That bad news was offset by the National Institute of Allergies and Infectious Disease Director Dr. Fauci who said that a vaccine might be readily available by April 2021.
The Canadian dollar may have been undermined by the latest International Energy Agency (IEA) monthly oil report. The IEA slashed its 2020 oil consumption forecast to 8.8 million barrels per day, a drop of 400,000 barrels. They also trimmed their Q1 2021 forecasts. The news follows on the heels of OPEC’s downgrade of its oil demand forecast, released yesterday. The latest lockdown measures in many parts of Europe are behind the cuts.
EURUSD is trading choppily with a negative bias in a 1.1760-1.1819 range. The single currency bottomed out just before Europe opened this morning, and rallied to 1.1819 where it stalled. The selling pressure stems from yesterday’s dovish comments by ECB President Christine Lagarde and follow-up comments today, by ECB policymaker Luis De Guindos. The ECB Bulletin, released today, highlighted downside risks to the economic outlook. German CPI data was as expected while Eurozone Industrial Production was on the weak side. The reports were not a factor for traders.
GBPUSD is trading at the bottom of its 1.3134-1.3227 range on the back of rising fears for a ‘no-deal” Brexit. There are still several significant issues that are unresolved, and the deadline is approaching. UK Q3 GDP grew 15.5% q/q in October. Traders were not impressed as the recent coronavirus lockdown measures mean growth will be worse in November.
US CPI and jobless claims data are on tap today. However, the results will not be a trading factor until the political situation is resolved.
Today’s Suggested Range USD/CAD: 1.3020 – 1.3120