Home Daily Commentaries Canadian dollar up on oil and equities

Canadian dollar up on oil and equities

Daily Currency Update

The Canadian Dollar held its position this morning against its US counterpart as oil climbed back over $92 a barrel and stock markets opened higher. This is despite the GDP release for July coming in this morning showing 0.0% growth opposed to an expected 0.1% bump in activity. This slowdown in economic growth though is leading investors to think he BoC might be down with rate hikes as signals are that the economy may be recession bound in early 2024.

Key Movers

Demand for the US dollar was down this morning after a key inflation measure fueled expectations that the bank might hold rates. The US Dollar Index (DXY) was down 0.43% this morning. The Fed’s preferred inflation measure, the Personal Consumption Expenditure (PCE) index, showed prices were up 3.5% year over year and month over month inflation was only 0.1%, which is the slowest inflation growth since March. Equities markets gained on the news in early trading and oil advanced back over $92 a barrel. This was tempered by Washington D.C. The US government seems headed for a shutdown as house Republicans can’t agree on a short-term continuing resolution aimed at keeping the lights on.

The US benchmark WTI oil price was back over $92 a barrel and Brent Crude was over $97 a barrel as traders remain concerned about global supply shortages. Markets are waiting for a meeting of OPEC+ next week to see if the oil cartel deepens current production cuts to keep prices high.

The GBP bounced in the overnight markets after UK GDP numbers showed 0.6% growth year over year, better than the 0.4% expected.

Expected Ranges

  • EUR/CAD: 1.4224 - 1.4342 ▼
  • GBP/CAD: 1.6445 - 1.6524 ▲
  • AUD/CAD: 0.8629 - 0.8253 ▲
  • USD/CAD: 1.3420 - 1.3541 ▼