US Fiscal stimulus drives market direction
Tuesday 9 February, 2021
Daily Currency UpdateCAD - Canadian DollarLike the snowbirds of years before COVID-19, the USDCAD has again gone south and favors the Canadian dollar. Demand for the US dollar has softened as traders and investors left the currency for equity markets and other assets.Although the US fiscal stimulus package has not been signed and the checks delivered, markets have high expectations. And they should. Despite the distraction of former President Donald Trump’s impeachment trial, the Biden administration has counted enough votes in the Senate and the House of Representatives to pass the legislation without Republican support.
Key MoversAfter dipping below 1.20 towards the end of last week the euro has regained some of its poise with EUR/USD now back up around the 1.21 handle. Whether this is a temporary correction before more losses are realized is yet to be seen. America’s vaccine program is also way ahead of the EU's so if this continues then it’s likely we could see EURUSD falling back to the 1.20 handle before too long.The pound pushed higher versus the US dollar over the past 24 hours as Sterling benefited from the UK's rapid COVID-19 vaccination program and the threat of negative interest rates being implemented by the Bank of England receded. Latest figures show that over 12 million people have now had at least one COVID-19 jab with the government well on its target to have vaccinated 15 million people by February 15.The Australian dollar edged higher through trade on Monday, extending back through 0.77 US cents as reflationary expectations gather pace. Commodities and equities both advanced Monday, dragging the AUD toward intraday highs at 0.7713, buoyed by expectations for sustained fiscal stimulus roll outs and wide spread immunization programs.
- EUR/CAD: 1.534 - 1.543 ▼
- GBP/CAD: 1.749 - 1.758 ▼
- AUD/CAD: 0.981 - 0.984 ▲
- USD/CAD: 1.271 - 1.276 ▲