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Canadian Dollar Falls to a Four Year Low Against the US Dollar

CAD - Canadian Dollar

The Canadian dollar fell to a four year low yesterday against the U.S. dollar as market participants grow increasingly concerned that needed measures taken to contain COVID-19 will hamper the global economy. Financial markets are in turmoil, as containment measures to stop the spread of Coronavirus look increasingly likely to send the global economy into a recession and potentially trigger an economic crisis. Equity trading in the U.S. was suspended at the start of trading yesterday for 15 minutes again, as Wall Street suffered its worst day since the stock market crashed on "Black Monday" in 1987. The decline has left stocks in the U.S. firmly in a bear market — a term that signifies a decline of 20 percent from the most recent highs. Oil prices also traded lower as price wars continue to ramp up between OPEC and Russia, couple this in an environment that most likely sees global demand for the oil wane in the coming quarters.

Key Movers

Both the UK and U.S. stock markets suffered their worst falls since 1987 yesterday, both dropping around 10 percent, leading to U.S. markets being temporarily being closed in New York for the second time this week. Soon after the bell rang in New York, the market fell by 7 percent, triggering the "circuit breaker," leading to a 15-minute pause in trading. It extended its losses; however it didn't hit the 13 percent drop, which would have signaled another 15-minute pause. European bourses didn't suffer any better with both France and Germany's main index's ending up more than 12 percent lower. Trump's flight embargo saw stocks in travel companies and airlines decline sharply. The move was not aided by the European Central Bank decision to keep rates unchanged despite promising to extend its Quantitative Easing program. Many market participants were expecting a cut in either its primary financing or its deposit rate to stimulate the economy; however, with rates already so low, there is little wriggle room for the ECB to move.

Expected Ranges

USD/CAD: 1.3781 - 1.3946 ▲

EUR/CAD: 1.5371 -1.5634 ▼

GBP/CAD: 1.7375 - 1.7530 ▼

AUD/CAD: 0.8683 - 0.8810 ▼

NZD/CAD: 0.8457 - 0.8579 ▼