Home Daily Commentaries CAD doesn’t capitalize on USD weakness

CAD doesn’t capitalize on USD weakness

Daily Currency Update

CAD - Canadian DollarDespite the weakness of the US dollar, USDCAD gained in favor of the US dollar this morning. USDCAD, which had been trading below 1.265 most of yesterday, climbed toward 1.27 this morning and teased 1.269.Demand for CAD was down against the euro, Great British pound, and Australian dollar as well this morning.Commodity prices continued to rise, which has had a positive knock-on effect for CAD. With much of the US hit by a cold front, demand for oil has pushed oil prices to their highest level in over a year. WTI crude broke through the $60 a barrel and Brent crude hit $63.75.

Key Movers

Great British pound continued to rally yesterday after Prime Minister Boris Johnson announced that the UK would lead a cautious but irreversible path out of the most recent COVID-19 lockdown measures. In just over two months, the UK has vaccinated 15 million residents or nearly 25% of its population. GBP benefited from weakness in the USD, breaking the $1.39 handle and tempting to test the psychological resistance level of $1.40. GBPUSD gained 0.5% yesterday and GBP gained 0.35% against the euro.The Australian dollar maintained a narrow trading band through trade on Monday, unable to break resistance at 0.7790/0.78 US cents. Limited news flow and an absence of headline data meant moves across currency markets were largely muted as markets essentially tread water, weighing near term pandemic lead uncertainty and soft data against longer term recovery expectations. The AUD bounced between 0.776 and 0.7790 for much of the day as investors sold into rallies approaching 0.78, reluctant to extend beyond this key resistance handle. We expect the AUD will remain range bound in the absence of a clear catalyst driving risk on gains.

Expected Ranges

  • EUR/CAD: 1.531 - 1.537 ▼
  • GBP/CAD: 1.757 - 1.766 ▼
  • AUD/CAD: 0.983 - 0.985 ▼
  • USD/CAD: 1.261 - 1.269 ▼