Canadian Dollar Update, November 26, 2020 – Canadian Dollar Ready to Scale new Heights
USD/CAD Open: 1.3006-10, Overnight Range: 1.2990-1.3022
WTI Oil is at $44.91 and gold is at $1,806.70. US markets are mixed today.
For today, USD resistance is at 1.3032. Support is at 1.2990.
• Canadian dollar appears poised for big rally
• Global equity and FX markets were quiet overnight
• US dollar still on defensive
The Canadian dollar continued to consolidate this week’s gains in an uneventful and quiet overnight session.
The Canadian dollar is benefiting from widespread, positive risk sentiment, which has led to substantial gains in AUDUSD and NZDUSD. The news of successful coronavirus vaccine tests unleashed a torrent of demand for the so-called “risk assets,” and helped to send crude oil prices sky-rocketing.
West Texas Intermediate (WTI), the North American crude oil benchmark price, touched $46.20 yesterday, a 37% increase from where it was at the start of November. OPEC and friends played a large role in the price surge after they leaked plans to extend existing production levels until March 2021.
AUDUSD and NZDUSD led the move higher because of their close trade relationship with China, and are seen as proxies for risk sentiment.
Australia and New Zealand are major sources of raw materials for China.
Yesterday, there was a large number of top-tier US economic reports released as well as the minutes from the November 5 meeting. The minutes were largely ignored because they didn’t offer any fresh insight.
The economic data was modestly soft. Q3 GDP was unchanged at 33.1%, which was the extent of the good news. New home sales fell 0.3%, consumer sentiment dropped 4.9 points, and personal income declined 0.75 in October. The latest surge in COVID-19 cases in America is taking a toll on the economy as seen by the 30,000 increase in weekly jobless claims.
Nevertheless, hopes that a coronavirus vaccine will soon be available shed the US data to the back-burner.
GBPUSD traded sideways in a 1.3344-1.3397 range supported by hopes for a Brexit trade deal, which if it occurs could lift GBPUSD to 1.4000. Yesterday, the Chancellor of the Exchequer unveiled a “mini” budget, which had little impact on trading.
EURUSD spent the overnight session trading in a 1.1903-40 range but profit-taking in the early Toronto session knocked prices to 1.1886.
News that Germany plans to extend coronavirus restrictions until January is weighing on prices.
The Canadian economic calendar is empty. FX action will be quiet due to the US holiday.
Today’s Suggested Range USD/CAD: 1.2960 – 1.3060