Canadian exports increase after historic April
Wednesday 1 July, 2020
Daily Currency UpdateCAD - Canadian DollarThe Canadian dollar weakened against the US dollar this morning after US employment figures painted a more positive sign for the US economy. The pair hit 1.362 after the data release.In addition to the US employment figures, Canadian exports increased 6.7% in May. Following historic declines in April, the increase reflected the resumption of production in the auto industry as well as high oil prices.Canada's merchandise trade deficit with the world narrowed from $4.3 billion in April to $677 million in May. In pure volume, exports were up 3.8% in May, while real imports fell 6.7%.As demand for Canadian products increases with the recovery, more foreigners will demand the Canadian dollar in order to pay for the exports. The export demand also impacts production and prices at Canadian manufacturers.Despite these positive indicators, COVID-19 continues to dominate trends. Most currency pairs with the US dollar remain entrenched within recent ranges.
Key MoversThe British pound ticked higher in the past 24 hours, but with little local data to drive it. Comments from Bank of England’s Jonathan Haskel helped the pound advance. He said that retail sales and spending more broadly appear to be recovering from their April lows, and that expected Q2 as a whole will not be quite as negative.Risk sentiment has been boosted by a COVID-19 vaccine from Pfizer and Germany’s BioNTech, which was found to be well tolerated in early-stage human trials. The 45 people that participated in the trial, which included placebos, saw a V-shaped recovery. Welcome news for the global economy that continues to tackle the virus and get back on its feet. This improved risk appetite has seen investors and traders sell their safe haven currencies and take a cautionary look at riskier assets. This can be seen in AUD and NZD gains against a basket of safe havens, such as the USD, overnight.
- USD/CAD: 1.356 - 1.362 ▼
- GBP/CAD: 1.693 - 1.702 ▲
- EUR/CAD: 1.527 - 1.535 ▲