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Oil drives demand for CAD

Daily Currency Update

CAD - Canadian Dollar

Demand for the Canadian dollar climbed against the US dollar as oil prices continued to hover around multi-year highs. Data last week also showed that Canadian employment is back to pre-pandemic levels, supporting the possibility of another cut by The Bank of Canada to their bond-buying program later this month. USDCAD was down 0.21%, trading at 1.2452 at the time of writing.

Key Movers

The euro struggled against the strengthening USD and broke below 1.550 on Tuesday. The ZEW indicator of economic sentiment in Germany slipped for the fifth month in a row, another indicator that supply chain crunches are slowing down recovery in Europe’s biggest economy. EURUSD was down 0.10%, trading around 1.5409 at the time of writing.

UK job vacancies surged to a record high of 1.2 million in September. The level of unemployment was shown to be 4.5%, however the data is likely to be somewhat skewed as it is the last report that factors in the UK Government's furlough scheme which came to an end last month. The discrepancy could cause some choppiness in the market over the coming months. Rising energy costs, continuing supply chain problems, and the omnipresent backdrop of COVID-19 mean there will be plenty to give investors jitters as we head into winter. Even the prospect of higher rates from the Bank of England, possibly as soon as November 4th, has done little to push the pound higher as markets debate whether this enforced action could damage the UK economy at a time when it is being enveloped in more and more uncertainty. GBPUSD was up slightly 0.04% at 1.3599 at the time of writing.

Demand for the US dollar climbed to a one-year high on Tuesday, boosted by analyst expectations that the Fed will announce easing of its bond-buying program in November. Some investors also flocked to the safe-haven currency as higher energy prices and inflation clouded the economic growth outlook. The US Dollar Index was trading around 94.42 at the time of writing.

Expected Ranges

  • EUR/CAD: 1.4367 - 1.4438 ▼
  • GBP/CAD: 1.6922 - 1.6991 ▼
  • AUD/CAD: 0.916 - 0.9199 ▼
  • USD/CAD: 1.2449 - 1.2494 ▼