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Oil prices push Canadian dollar up

CAD - Canadian Dollar

Demand for theCanadian dollar continued to push up against the US dollar today after oil prices rose for a third day and US stockpiles fell.

Easing restrictions in the United States and parts of Europe signalled a strong demand for fuel consumption in the near term. This is offsetting concerns over the worsening Covid-19 situation in India, a key importer of oil. US crude oil prices rose to $66.44 a barrel,and with it, demand for Canadian dollar pushed USDCAD down to 1.2271.

The monthly jobs report for April is due on Friday. The Canadian jobs market blew past expectations in the last two months. 303,100 jobs were added to the economy in March, following an increase of 259,200 in February.

Key Movers

The rise in the US dollar pushed down the euro briefly below the $1.20 mark today, but it has steadied at that mark at the time of writing. Economists believe the Eurozone will be amongst the sharpest recoveries globally and that there is over EUR 170bn readily available in consumer savings, ready to spend once lockdowns have been lifted, which could have a positive impact on the euro.

The UK is beginning to face unexpected Brexit repercussions just a week after the post-Brexit trade deal was finalized. France asked itsEuropean counterparts to reconsider the approval of the deal. It has also been reported that President Joe Biden will actively dismiss any UK-US bumper trade deals and put them on the 'back burner'.GBPUSD struggled to break $1.40 before the Brexit deal was finalized. These roadblocks could seriously knock the pound in the short term.

The US dollar climbed to a two-week high, buoyed by a selloff in tech stocks and correction in treasury yields. The dollar’s bounce was partially sparked by comments of the possibility of an earlier than expected rate hike. The dollar index hit 91.436, its highest since April 19.

Expected Ranges

EUR/CAD: 1.472 - 1.482 ▼

GBP/CAD: 1.705 - 1.711 ▼

AUD/CAD: 0.946 - 0.950 ▲

USD/CAD: 1.226 - 1.233 ▼