Daily Currency Update
CAD - Canadian DollarThe Loonie trades at the mercy of the U.S. dollar this morning with the absence of local data to drive a fundamental direction. The USD/CAD pair increases 0.11 percent, trading at 1.3264 at the time of this writing (weaker Loonie).Technically speaking, the USD/CAD pair has broken a downtrend to the upside on February 3rd, which is not positive for the Loonie. However, in the short-term, an uptrend has been penetrated to the downside starting this week, which makes a case for the USD/CAD pair to keep falling if there is less negative news about the Coronavirus. The risk is that a breakout above 1.3383 would make the rate move higher over the longer-term.Just as the North American session ended yesterday at 5 pm EST, the Japanese Yen rose against the Loonie on Thursday as investors sought safe havens after China’s Hubei province, the epicenter of a Coronavirus outbreak, reported a sharp jump in the number of new cases. Using a new method of diagnosis, Hubei on Thursday reported 14,840 fresh cases of the virus as of Feb. 12, up from 1,638 new cases on Tuesday, with the number of deaths in the province rising by to a new daily record of 242 and increasing the total deaths in the province to 1,310.
Key Movers
The EUR/USD pair dangerously continues a downtrend, as once again, it made new lows in the U.S. session yesterday with a continuation of U.S. dollar demand from market participants. The catalyst for this downtrend is the widest economic data divergence seen in years (U.S. vs EUR). Technically speaking, the strong downtrend is very clean, there is a support at 1.0850 and a key resistance at 1.0875. All of the “bottom fishing” orders from market participants keep coming, but it looks like fundamentals will keep pushing the price lower in the short-term. The British Pound pared gains against the U.S. dollar before recovering ground after reports that U.K. Chancellor of the Exchequer, Sajid Javid, resigned from Boris Johnson’s government. The GBP/USD pair is trading at 1.3007 at this moment. It is hard to evaluate the Pound in the medium-term, but, right now, the Pound’s bounce is more linked to Johnson’s wish to boost the fiscal impulse more than Javid’s rules would imply. Therefore, market participants are buying more Pounds following Javid’s resignation and causing speculation that the U.K. may move towards more fiscal stimulus.
Expected Ranges
- USD/CAD: 1.3216 - 1.3269 ▲
- EUR/CAD: 1.4375 - 1.4472 ▼
- GBP/CAD: 1.7200 - 1.7337 ▲
- AUD/CAD: 0.8903 - 0.8940 ▲
- NZD/CAD: 0.8539 - 0.8595 ▲