Daily Currency Update

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What goes down, must go up

CAD - Canadian Dollar

After the Federal Reserve announced higher inflation expectations and no change to its interest rates, increased demand for the US. In addition, 10-year US Treasury yields jumped to 1.75% after the Fed announced that it would not extend capital relief rules. The decision requires banks to include treasury and deposits on their leverage ratio. The rule goes into effect at the end of March.

USDCAD reached a three-year low on Wednesday. Since USDCAD hit 1.237, the pair has only gone higher. Its now up 1.25% and traded at 1.252 this morning.

Key Movers

Both the euro and Great British pound were unchanged for the weekend despite both initially rallying on Wednesday due to the Federal Reserve’s commitment to a dovish monetary policy. The GBP fell 0.47% on Friday following the news that Bank of England persevered its dovish tone and did not expect interest rates to be increased till inflation started rising. This Friday kicks off the latest European Summit with markets hoping for an update on the €672.50bn Recovery and Resilience Facility to support the EU region during the pandemic crisis.

The Australian Dollar finished off the week slightly lower from Monday’s open despite a strong push midweek towards 79 US cents. The latest Retail Sales print on Friday was a disappointing result, extending losses for the local currency to intraday lows of 0.7724. Retail turnover was down 1.1%, well short of an expected increase of 0.6% in the month of February due to short term lockdowns in both Western Australia (down 4%) and Victoria (down 6%).

Expected Ranges

EUR/CAD: 1.485 - 1.494 ▼

GBP/CAD: 1.727 - 1.734 ▼

AUD/CAD: 0.964 - 0.970 ▼

USD/CAD: 1.247 - 1.253 ▼