Commodities keep CAD demand strong
Tuesday 23 February, 2021
Daily Currency UpdateCAD - Canadian DollarSurging commodity prices and a weaker USD drove gains for the Canadian dollar and pushed USDCAD to a low not seen since April 2018.With USD demand down, USDCAD hit 1.258 in overnight trading. And although there was a spike above 1.26 at the opening of the North American trading session, USDCAD fell below 1.26 once again.Copper moved through $9,000 a ton for the first time in almost a decade while oil advanced over 3%.
Key MoversSo, there we have it. After several weeks of posturing with the media and even more weeks of falling infection rates Prime Minister Boris Johnson announced how England (and presumably the rest of the UK) would slowly and gradually exit from the current lockdown restrictions. With a frenzy of WhatsApp messages there has already been a surge of holiday bookings with EasyJet reporting a 630% increase in bookings to some locations across Europe. The pound has been the strongest G10 currency since the start of the year given the success of the vaccine rollout. This 'vaccination trade' assumes that the UK would then be the first to the party to ease restrictions. The conservative nature of Johnson's easing however may scupper this and the comparative advantage that the UK (and Sterling) has now may disappear.The Australian dollar led gains through trade on Monday, finally breaching resistance at 0.78 US cents as reflation driven trade forced commodities and commodity currencies higher. Rates across treasuries surged with both Australian and NZ yields leading markets higher through the domestic session as investors chased higher returns, largely ignoring the RBA’s QE bond purchase announcement.
- EUR/CAD: 1.531 - 1.534 ▲
- GBP/CAD: 1.771 - 1.778 ▼
- AUD/CAD: 0.995 - 0.998 ▲
- USD/CAD: 1.258 - 1.264 ▲