The Loonie falls following a strong US dollar
Tuesday 23 April, 2019
Daily Currency UpdateCAD - Canadian DollarThe USD/CAD pair is increasing 0.40 percent (weaker Loonie) this morning, although crude oil continues surging. The move in crude oil comes after the Trump administration’s decision to end waivers on the ban of Iranian oil exports in an attempt to increase pressure on the Tehran regime. The strength in crude oil is backed by a reaction from Iran that it can shut the Strait of Hormuz, a waterway vital for global oil shipments. However, Reuters reported that Saudi Arabia was planning to ramp up its crude oil output in response to the US actions. At the time of this writing, crude oil is virtually unchanged on the day. On the release front, wholesales month to month came in at 0.3 percent when the expected was 0.1 percent.The USD/CAD pair approached a decent support level of 1.3340 yesterday ahead of the BoC meeting tomorrow at 10:00 am. There is consensus that the BoC will remain on hold along with the Fed in 2019. The risk at this point is the more neutral stance of Poloz in his/BoC communication. Technically speaking, apart from the 1.3340 level, the following support level is 1.3319. On the other side, some key resistance levels are 1.3425 and 1.3438.
Key MoversYesterday, oil importer currencies such as India (INR) and Turkey (TRY) suffered while exporters like Canada (CAD) strengthened.Today, the EUR/CAD pair was negatively affected after European equity banks slumped as ECB member Benoit Coeure dampened hopes for more aid for the financial sector. Benoit Coeure said he saw no reason for creating a tiered deposit rate that exempts banks from part of an ECB charge on their idle cash. The interest rate on the deposit facility is currently a negative 0.4 percent. However the EUR/CAD pair is trading flat at 1.5023 after a strength in the US dollar at the time of this writing. Furthermore, the Bank of Japan, Bank of Russia, Sweden’s Riksbank and Bank of Indonesia will set monetary policy this week.
- USD/CAD: 1.3328 - 1.3439 ▼
- EUR/CAD: 1.5053 - 1.4915 ▼
- GBP/CAD: 1.7292 - 1.7420 ▲
- AUD/CAD: 0.9505 - 0.9555 ▼
- NZD/CAD: 1.0625 - 1.0772 ▲