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Global covid concerns weigh on Canadian dollar

CAD - Canadian Dollar

The Canadian dollar followed equities and risk assets lower as investors sought the safety of bonds and haven currencies amid growing uncertainty and a rise in Covid-19 infections.

A spike in cases across Europe has prompted calls for renewed lockdown measures with France, the UK and Spain all introducing targeted social distancing protocols. Meanwhile the US 14-day moving average pushed higher, suggesting a spike in new infections. Daily case numbers again neared 40,000.

Pandemic restrictions coupled with uncertainty surrounding the US election increased concern for a broader economic recovery. Investors adjusted their overall risk tone and demand for the US dollar pushed USDCAD above 1.33, a five-week high for the pair.

Key Movers

The euro was weighed down by negative comments from the European Central Bank President Christine Lagarde. She said that the economic recovery remains very uncertain, uneven and incomplete. Lagarde reiterated that the ECB stands ready to amend all its instruments as appropriate and the increased exchange rate put prices under downside pressure.

Difficulties in the banking sector caused unease for investors risk appetite. Yesterday a report was released stating that some UK banks had moved illicit funds over the past two decades. The Great British pound reached a one-week low on Monday

The Australian dollar followed equities and risk assets lower as investors sought the safety of bonds and haven currencies amid growing uncertainty and a rise in Covid-19 infections. A spike in cases across Europe has prompted calls for renewed lockdown measures with France, the UK and Spain all introducing targeted social distancing protocols. Attentions today turn to RBA deputy Guy Debelle as he addresses key industry groups. Investors will be keenly attuned to any hint a change in monetary policy may be forthcoming.

Expected Ranges

EUR/CAD: 1.558 - 1.567 ▲

GBP/CAD: 1.694 - 1.709 ▲

AUD/CAD: 0.955 - 0.962 ▲

USD/CAD: 1.329 - 1.334 ▼