Canadian dollar remains down

Key Movers

The US dollar has been gaining against other major currencies all week bringing the US dollar Index (DXY) up 0.5% this week. This strength comes during a week when stock markets have dropped off, seeing the Dow Jones average losing 1.5% since Monday. Commodities have been losing ground as well with oil dropping from $87 a barrel on Monday to $84 today. The uncertainty coming from this had driven investors to the safety of the USD. In this morning’s releases, the personal consumption expenditures (PCE) inflation data in the US came out in line with expectations at 3.4% year-over-year which was the same as last month. This takes the pressure off the Federal Reserve to hike rates next week, with markets now expecting a Fed hike to be pushed to December.

The euro is ending the week down after yesterday’s European Central Bank (ECB) rate announcement. The bank held interest rates at 4.5% in the eurozone, putting euro bonds at an interest rate disadvantage against US bonds.

Oil prices, which rose last week with tensions in the Middle East, have settled this week and are heading into Friday down $3 a barrel from Monday. A mix of calming markets and easing demand has helped bring oil back down. This is having a negative impact on commodity-linked currencies like the CAD and AUD as they are closely tied to oil prices.