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Loonie Strengthens as Oil Spikes on Dampening Concerns over COVID-19

CAD - Canadian Dollar

The Loonie moved higher against its USD counterpart Tuesday and overnight as COVID-19, the new name given to the Coronavirus by the WHO (world health organization ) may be close to peaking as newly infected cases drop. The outlook has boosted crude oil prices as easing concerns of COVID-19, which has affected over 45,000 people and taken the lives of 1100 global mostly from the epicenter in Wuhan City and Hubei province in China. West Texas Intermediate has climbed 2.18 percent to 51.03 a barrel; oil also saw a boost in prices after Russia said it would review a paper from OPEC to cut production by 600,000 barrels a day. The Loonie on Monday hit a four-month low against the greenback as global growth concerns hit the petro currency on a lackluster outlook for commodities since the signing of Phase One trade pact between the U.S. and China. Resistance for the USD/CAD is seen at 1.3333 with an upside break to 1.3378 and 1.3422; support levels are seen at 1.3245 and 1.3201.

Key Movers

The U.S. dollar edged lower through trade on Tuesday and into Wednesday morning, edging off four-month highs as risk appetite improved and demand for haven assets abated. With volatility across currency markets largely non-existence as of late, the greenback remains mostly well supported, and we expect the broader bullish narrative to continue, especially as investors look to short the Euro in a carry play to foster a higher yield return. The Euro fell through 1.09 touching 1.0870 before the shift in risk sentiment helped foster a small bounce into this morning's open.
With safe-haven assets under-performing overnight, we expect broad-based direction to continue fluctuating on headline new updates and events concerning the COVID-19. Attention turns to Fed Chair Jerome Powell as the primary macroeconomic driver in his second day of testimony on Capitol Hill.

Expected Ranges

USD/CAD: 1.3245 - 1.3330 ▼

EUR/CAD: 1.4455 - 1.4517 ▼

GBP/CAD: 1.7178 - 1.7238 ▼

AUD/CAD: 0.8915 - 0.8956 ▲

NZD/CAD: 0.8499 - 0.8608 ▲

EUR/USD: 1.0899 - 1.0926 ▼