The Greenback sinks as commodity currencies gain strength. The Loonie rallies, supported by a dovish BoC.
Wednesday 15 July, 2020
Daily Currency UpdateUSD - United States DollarThe US dollar declined along with safe haven currencies as market participants were following reports about the possibility of a coronavirus vaccine (Moderna Inc.’s progress in an initial safety trial among patients) and because Goldman Sachs Group Inc.’s trading revenue beat analysts’ expectations. Secretary of State Michael Pompeo said the U.S. will impose visa restrictions on some workers for Huawei Technologies Corp. The move Pompeo announced Wednesday is the latest in the U.S. efforts to bar Huawei’s technology on accusations of espionage on Americans.Commodity currencies lead gains among G-10 peers, with the Norwegian Krone and Australian dollar outperforming to the US dollar by 1% and 0.4%. The Swiss Franc was the worst performer among G10 currency peers. The USD/CHF pair trades at 0.9437, increasing 0.37% this morning.
Key MoversThe Loonie strongly rallies following the BoC keeping its interest rate close to zero at 0.25% until the 2% inflation target is “sustainably achieved.” Furthermore, the BoC announced it would keep the 0.25% rate until inflation returns to target and it would be at least until 2022 based on BoC forecasts released separately. Governor Tiff Macklem added, “...as the economy moves from reopening to recuperation, it will continue to require extraordinary monetary policy support,” in Canadian government bonds until the recovery is, “...well underway.”OPEC+ is looking for extra production cuts from members that have missed their targets again in June, and to balance the impact of the supply continuation. Crude oil rose near its highest level since March as U.S. crude inventories looked set for a large drop.Hopes of an agreement on the recovery fund continue to grow as both Merkel and Rutte signal signs of compromise. The Euro rallies 0.1% versus the US dollar, trading above 1.1400 handle.
- USD/CAD: 1.3491 - 1.3550 ▼
- EUR/USD: 1.1363 - 1.1450 ▲
- GBP/USD: 1.2527 - 1.2615 ▲
- AUD/USD: 0.6970 - 0.7020 ▲
- NZD/USD: 0.6533 - 0.6600 ▲