Daily Currency Update

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CAD slips slightly as oil prices drop

CAD - Canadian Dollar

The Canadian dollar moved modestly lower against its US counterpart this morning, even as Canada posted a surprise trade surplus in April. The move lower could be attributed to a recent slip in oil prices. USDCAD was up 0.07% at 1.2087 at the time of writing.

Data showed that the economy had a surplus of $594 million in April, as exports outpaced imports at a quicker rate. Analysts had estimated a deficit of $700 million.

In April, the Bank of Canada became the first among seven major central banks to cut back on pandemic support, indicating that it could start raising interest rates in 2022. Tomorrow, policymakers are expected to maintain the central bank’s current policy setting and confirm their outlook for a rate adjustment late next year.

Key Movers

Germany’s factory orders missed expectations in April. Some analysts suggest that this indicates the Eurozone economy still had some significant slack. All eyes are on Thursday’s monetary policy meeting by The European Central Bank. The expectation is for policymakers to maintain the current setting, but a shift in rhetoric could drive up demand for the euro. EURUSD was down 0.13%, trading at 1.217 this morning.

The UK’s Health Secretary Matt Hancock stated it was too early to confirm if the planned June 21st date to end lockdown restrictions would remain the same. Market participants could see the pound sell off against the dollar or the euro if there’s a delay in England’s reopening. GBPUSD was down 0.34%, trading at 1.413 at the time of writing.

The US dollar edged slightly higher against a basket of currencies as investors waited for inflation data. The Consumer Price Index report, a measure of inflation that the US Federal Reserve pays attention to, is due on Thursday. The US Dollar Index was up 0.11%, trading at 90.05 at the time of writing.

Expected Ranges

EUR/CAD: 1.470 - 1.473 ▼

GBP/CAD: 1.708 - 1.713 ▼

AUD/CAD: 0.934 - 0.937 ▼

USD/CAD: 1.205 - 1.209 ▲