CAD - Canadian Dollar
The Canadian dollar fell sharply as oil prices plunged amid concerns that increasing coronavirus infections will force renewed lockdown measures and re-ignite supply issues that plagued oil markets in April.
A slew of dour headlines prompted a shift in risk sentiment on Wednesday, driving equities lower and dragging commodity currencies downward. The USD/CAD rate peaked at 1.365 amid increasing market nervousness. A surge in COVID-19 cases prompts calls for renewed social distancing measures. Meanwhile, US and EU trade tensions and a correction in the IMF economic outlook added further demand away from Canadian currency.
Attentions today turn again to US Jobless claims, durable goods orders and annualized GDP numbers. However, these could well be overlooked as markets focused on COVID-19 second wave fears.
The US dollar was the big winner Wednesday, as risk sentiment soured and investors sought safety in haven assets. An alarming rise in coronavirus infection rates around the world, with the US recording its second largest increase in new infections since the pandemic began prompted calls for a return to strict social distancing controls. Investors appear to be finally coming to grips with the fact that the second wave of infections will likely derail the economic rebound as a longer path to recovery lies ahead. A fact evidenced by the IMF most recent review of economic activity. The IMF now expects global output will shrink almost 5%, up from its 3% estimate in April, as advanced economies like the US suffer unprecedented declines in GDP output.
The Euro fell through 1.13 and 1.1250, touching intraday lows at 1.1245 after the Office of US Trade announced that new tariffs will be imposed on over $3 billion of European imports, with some tariffs as high as 100%. The note comes as the World Trade Organization rules on EU issued tariff on US goods and serves as a reminder of US-EU trade tensions.
1.359 - 1.367 ▼
1.527 - 1.535 ▲
1.690 - 1.697 ▼