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Canadian dollar slips from three-year high

CAD - Canadian Dollar

The Canadian dollar slipped slightly today after data showing a surprise trade deficit. Statistics Canada reported a trade deficit of $1.1 billion in March. Analysts expected a surplus of $700 million after February.

Demand for USD increased, pushing USDCAD up to 1.232 today, after reaching multi-year lows. Commodity prices supported a strengthening Canadian dollar. Traders are eyeing the weekly report on US crude oil supplies tomorrow.

Key Movers

The Eurozone slid into a double-dip recession in the first three months of this year as output dropped under the weight of lockdown measures to contain a resurgence of coronavirus infections throughout Europe. GDP fell 0.6% in Q1 which is its second dip after a 0.7% fall in the previous quarter. On the plus side, economists are expecting consumers to unleash a wave of pent-up spending once countries begin to ease lockdown measures.

Despite EU and British lawmakers formalizing the post-Brexit deal last week, which is a big step to ensuring free trade, France hasn’t eased its Brexit bias. France's challenge could cause some GBP volatility in the coming days.

The Bank of England’s latest monetary policy report is due this Thursday, with rates expected to hold steady in the same way the US Federal Reserve did last week. Sterling is expected to take some real direction from Thursday's meeting, but what direction that will be is yet to be deciphered.

The US dollar bounced back up today after giving up three tenths of a percent yesterday following softer than anticipated manufacturing data and a correction in US 10-year treasury yields.

Expected Ranges

EUR/CAD: 1.478 - 1.483 ▲

GBP/CAD: 1.705 - 1.711 ▲

AUD/CAD: 0.947 - 0.953 ▼

USD/CAD: 1.226 - 1.234 ▼