Daily Currency Update

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Loonie climbs on US oil inventory glut

CAD - Canadian Dollar

US crude oil inventories far outpaced expectations this month and the Canadian dollar went higher on the news.

US crude oil inventories were nearly double the forecasted levels. Watchers expected 3.2 million barrels, but with 5.7 million barrels in inventory imbalances in the market will lead toward a shift in production and price volatility.

The Canadian dollar is up 0.6% against the US dollar this morning.

Key Movers

Optimism surrounding a COVID-19 vaccine drove equity markets higher. Moderna Therapeutics announced it was planning a phase III trial to test the safety and efficacy of its vaccine and expected to deliver 1 billion doses by early 2021. Currency values, and equity markets, have fluctuated with each vaccine announcement.

The news of 191 new COVID-19 cases in Victoria yesterday led to the announcement of a 6-week lockdown in metro Melbourne and a closure of the Victoria-NSW Border by the Victorian government. The local currency, which was approaching the key 0.7000 handle at Asian open, was sold off nearly 60 points on the news to trade closer to 0.6930. As expected, the RBA maintained their monetary policy stance yesterday, holding the cash rate at 0.25% and delivered nothing of impact to markets.

Expected Ranges

USD/CAD: 1.353 - 1.362 ▲

GBP/CAD: 1.702 - 1.709 ▲

EUR/CAD: 1.532 - 1.535 ▼