Home Daily Commentaries The Canadian dollars continues drop as Stocks and Oil lose ground

The Canadian dollars continues drop as Stocks and Oil lose ground

Daily Currency Update

The Canadian dollar fell to its lowest against the USD since July 2020 this morning as markets continue to trim off risk.  Stock markets opened over 400 Points down and WTI oil has dropped under $80 a barrel for the first time since January.  These sell offs are leading to investors buying USD treasuries as a safe haven.

Data wise, the retail sales print for July showed sales had slowed more dramatically than expected.  The print came in at -2.5% versus the consensus -2%.

Key Movers

In both Germany and France, Europe’s 2 largest economies, the S&P composite came out under a reading of 50.  This shows that confidence in both the manufacturing and service sectors is falling.  The Euro has fallen off and is closing in on 20 years lows against the Dollar.

In APAC countries, The Bank of Japan stood still on rates leaving their overnight rate unchanged.  The Japanese government then intervened in the markets for the first time since 1988, stabilizing the yen and boosting it by just over 1% against the USD.

In England, the BoE raised rates yesterday by 50 points in an effort to curb inflation.  The decision was not a unanimous vote, which gave cast a further shadow in the pound.  The spit in the vote is making investors nervous as a signal that market expectations may not be met.

In Australia, the Aussie dollar trades weaker today, between 0.6677 and 0.6746. There was no data in Australia today with all the movement seemingly a continuation of the risk aversion strategies that are buffering the USD against risk sensitive currencies.

Expected Ranges

  • EUR/CAD: 1.3176 - 1.3285 ▼
  • GBP/CAD: 1.4896 - 1.5216 ▼
  • AUD/CAD: 0.8883 - 0.8967 ▼
  • USD/CAD: 1.3466 - 1.3572 ▲