Oil slumps amid Russia-Ukraine peace talks
Tuesday 29 March, 2022
Daily Currency UpdateThe Canadian dollar was little changed against the US dollar on Tuesday as oil fell amid continuing peace talks between Russia and Ukraine. The price of oil, one of Canada's main exports, slumped after Moscow said it would scale back military operations in the direction of Kyiv and Chernihiv, while Ukraine proposed adopting a neutral stance.
Yesterday, the US dollar was supported by expectations of an interest rate hike by the US Federal Reserve, and the US Dollar Index pushed up around 0.42%. The Russia-Ukraine conflict, and China’s latest COVID-19 outbreak, have kept investors uneasy. Safe-haven currencies such as the US dollar tend to increase in value during times of global risk and uncertainty. The US Dollar Index has retraced since then, sitting around 98.19 at the time of writing.
Key MoversThe euro extended its rally against the US dollar on Tuesday as peace talks continued between Russia and Ukraine. A speech from European Central Bank president Lagarde and the release of the EU unemployment rate are due Wednesday and Thursday respectively. Christine Lagarde’s speech could give us an insight into what the ECB is likely to do with regard to policy action come April. The ECB are yet to change their interest rates, unlike the Bank of England and Federal Reserve who have already begun increasing their interest rates. EURUSD was up 1.20% at 1.1117 at the time of writing.
The pound rebounded versus the US dollar on Tuesday after starting the week down, caused by mixed market sentiment and some US dollar strength. Yesterday, sterling declined when Bank of England Governor Andrew Bailey gave a speech, saying “we have been very cautious on forward guidance language because things are so uncertain”. When asked about May’s rate decision Bailey went on to say that the current situation is very volatile. GBPUSD was up 0.39% trading at around 1.3141 at the time of writing.
- EUR/CAD: 1.3738 - 1.3929 ▲
- GBP/CAD: 1.6332 - 1.6456 ▲
- AUD/CAD: 0.9345 - 0.9402 ▲
- USD/CAD: 1.2477 - 1.2582 ▼