Daily Currency Update

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Oil, COVID weaken Canadian dollar

CAD - Canadian Dollar

Volatility in the equity markets pushed demand for the Canadian dollar lower against trading partners this morning.

The US dollar strengthened against the Loonie. USDCAD reached a 7-day high and went through 1.33 this morning.

What’s driving demand for the US dollar? First, Equity markets are down. The S&P500 is down 2.5% and NASDAQ is down 1.5%. Second, oil declined on the news that Libya said it would resume some crude exports. Third, a surge of COVID-19 cases created further uncertainty.

Key Movers

A fresh wave of COVID-19 cases in Europe look to have also taken the sting out of any potential recovery in markets as fresh lockdowns look to be put in force. Both Spain and the United Kingdom saw daily infection surge as governments look to contain cases with limiting gatherings and enforcing curfews.

Throughout the week, European lawmakers will be meeting to discuss several concerns they have with the current external geopolitical situation. These range from tensions with China to Brexit negotiations. There will be a raft of manufacturing and services data released on Wednesday morning to look out for.

The potential for negative interest rates by the Bank of England and ongoing hopes for a Brexit agreement between the United Kingdom and Europe look set to heighten volatility for cable before the imposed negotiation deadlines by October 15.

Expected Ranges

EUR/CAD: 1.558 - 1.565 ▼

GBP/CAD: 1.698 - 1.710 ▲

AUD/CAD: 0.957 - 0.965 ▲

USD/CAD: 1.317 - 1.331 ▼