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Demand for Canadian dollar extends

CAD - Canadian Dollar

Demand for the Canadian dollar was up again today, hitting 1.220 per US dollar, as commodity markets continue to climb.

Demand for the currency has been bolstered by advancing oil prices, an improved forecast for the domestic economy and the quickening rollout of Covid-19 vaccines across the country.

The US is still predicted to outpace Canada’s economic recovery, as economists forecast weaker Canadian jobs data tomorrow. Analysts expect Canada to have lost 150,000 workers in April, a reversal from strong numbers in the previous two months.

Key Movers

The Bank of England sees a faster than anticipated economic recovery for the UK and held interest rates steady. The central bank raised its 2021 growth outlook to 7.25%, up from a forecast of 5% in February. The central bank said it would cut back its bond-buying each week to 3.4 billion pounds, down from 4.4 billion pounds a week. Sterling initially fell on the announcement but regained against the US dollar and the euro.

Investors are also watching the Scottish parliamentary elections. If the Scottish National Party manages to achieve a majority, the chances of a Scottish independence referendum is high. This result could negatively impact GBP, as without Scotland, the British economy weakens.

The Australian dollar dropped overnight after China suspended economic dialogue with Australia, but rebounded back to 0.7752.

The US dollar fell from a two-week high before bouncing back slightly after better than expected jobless claims data. Jobless claims fell to 498,000 last week, falling below 500,000 for the first time since March 2020, according to The Department of Labor’s report. Focus now turns to Friday’s monthly jobs report, with analysts expecting an increase of 978,000 non-farm jobs in April.

Expected Ranges

EUR/CAD: 1.470 - 1.476 ▼

GBP/CAD: 1.693 - 1.707 ▼

AUD/CAD: 0.946 - 0.951 ▼

USD/CAD: 1.219 - 1.228 ▼