Daily Currency Update

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Canadian GDP for January Considered Baseline Per COVOD-19

CAD - Canadian Dollar

Statistics Canada released January 2020's GDP summary today, and this release represents the baseline of the Canadian economy for measuring the impact of the COVID-19 crisis on various industries in the coming months. GDP will be an essential barometer going forward as the Canadian and global economy has changed since January amid the worldwide pandemic of COVID-19. Canadian month over month data for January was 0.1 percent consensus was looking for 0.2 percent. The reduced trade with China and advisories against the non-essential travel to China did affect growth Statistic Canada pointed out. Coupled with travel advisories was the decline in demand for crude oil as a slowdown in global economic activity was building, as well as tensions between oil-producing countries also lead to a supply glut. Statistic Canada has warned that with disruptions to many different supply chains and temporary closures to non-essential services and interest rates being cut that the economic effect of COVID-19 will be seen in the coming months.

Key Movers

The U.S. dollar advanced against the majority of significant counterparts through trade on Monday, finding support after a string of daily depreciation through last week. Month-end re-balancing helped bolster demand for the world base currency, driving the dollar index 1 percent higher as the Euro fell back through 1.11 and 1.1050 and Sterling's upturn stalled.
While investors have checked the upturn of mid-March, there is still ample scope for USD upside. Despite the Fed injecting masses of funding into the global economy and stabilizing swap lines, USD demand and supply-side balances remain fragile. At the same time, another liquidity squeeze could prompt another run on emerging markets and risk assets, driving the dollar higher.

Expected Ranges

USD/CAD: 1.4163 - 1.4326 ▲

EUR/CAD: 1.5569 - 1.5702 ▲

GBP/CAD: 1.7383 - 1.7779 ▲

AUD/CAD: 0.8630 - 0.8806 ▲

NZD/CAD: 0.8447 - 0.8557 ▲