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CAD down despite oil prices rally

Daily Currency Update

CAD - Canadian Dollar

Demand for the Canadian dollar edged lower against its US counterpart despite oil prices gaining momentum after the US announced its decision to release 50 million barrels of crude from its strategic reserve. USDCAD trading around 1.2715 at the time of writing.

The US dollar remained buoyed versus its major peers as the drop off in global risk sentiment continued to support the safe-haven currency. The re-nomination of US Federal Chair Jerome Powell to a second term also reinforced the market’s view that the Fed is likely to begin raising interest rates after the end of its bond buying program in mid-2022. This move has kept demand for USD at around 16-month highs.

Key Movers

Fresh lockdowns in Europe have helped put pressure on the euro as investors continue to flock to safe haven assets. Additionally, it appears that all European Central Bank members are on the same page regarding European monetary direction, suggesting a change in policy may not be on the horizon. EURUSD was sitting at 1.2642 at the time of writing.

The pound also struggled on Tuesday on the back of USD strength. Brexit news also continued to weigh on the currency. The UK reportedly won't trigger Article 16 before Christmas, suggesting that they are expecting negotiations to continue in the next few weeks. Brexit uncertainty has remained an anchor for the pound for the past few years. GBPUSD was down 0.23% at around 1.3367 at the time of writing.

Expected Ranges

  • EUR/CAD: 1.4259 - 1.435 ▲
  • GBP/CAD: 1.6973 - 1.7045 ▼
  • AUD/CAD: 0.9164 - 0.9202 ▲
  • USD/CAD: 1.268 - 1.2744 ▲