CAD slumps against USD as oil prices fall
Friday 17 December, 2021
Daily Currency UpdateDemand for the Canadian dollar slumped against the US dollar on Friday after a slew of central bank commentary from the previous day. Investors also favored safe haven assets like the US dollar and treasury bonds over equities this morning as more concerns over Omicron swirled and as oil prices fell. The US Dollar Index, which measures the dollar against a basket of major currencies, was up 0.39% trading around 96.42 and USDCAD was up 0.58% trading at 1.28478 at the time of writing.
Key MoversYesterday, the Bank of England shocked markets by announcing a 15bp interest rate hike from 0.1% to 0.25%. This is the first time in over three years that this has happened as the central bank attempts to tackle surging prices across the UK. The rate hike surprised a few given the ongoing Omicron situation across the UK which could potentially cause a slowdown in the economy due to people spending less. But clearly Wednesday’s CPI print of 5.1% – the highest level we have seen in 10 years – was enough for the Bank of England members to vote in favor to combat these inflationary pressures. The European Central Bank meeting went largely as expected. They announced that the Pandemic Emergency Purchase Programme would end in March while also raising their inflation forecasts for 2022 slightly higher. ECB President Christine Lagarde also announced that a 2022 rate hike is highly unlikely but didn’t go as far as saying that this was definite. GBPUSD was down 0.52% at around 1.3257 while EURUSD was down 0.54% sitting at 1.12682 at the time of writing.
- EUR/CAD: 1.4449 - 1.4531 ▲
- GBP/CAD: 1.7002 - 1.7065 ▼
- AUD/CAD: 0.9158 - 0.919 ▲
- USD/CAD: 1.2769 - 1.2846 ▲