Canadian gains on equity rally, stronger oil
Daily Currency UpdateThe Canadian dollar saw a fresh 2 year low briefly yesterday before rebounding and closing up on the day. Continued strength in equities and oil touching $89+ a barrel is helping the CAD hold those gains in early trading.
Key MoversThe USD had quite a day yesterday with the currency making big gains after a stronger than expected 8.2% inflation was announced. Then, just as swiftly the world’s biggest currency lost all the ground and then some as the attention turned to equities markets that all closed the day up. Seemingly, the thinking is that more aggressive hikes will spur a recession quicker than expected. This could cause rate cuts to be in 2023, contra to signals from the Fed. In today’s news, US retails in September continued to slow down coming in at a flat 0.0% compared to an expectation of 0.2%.
The GBP continues to rise this morning with the USD still under pressure on equities both the North American and Asian trading sessions. The pound got an additional boost this morning with the announcement that the new Liz Truss government is pulling a U-turn on the tax cut policy that threw markets into a tailspin in September. This will also be done under a new Chancellor of the Exchequer Jeremy Hunt.
In Asian markets, the JPY is down again against the USD, hitting a new 32 year low against its biggest trading partner. This did bring some foreign investment into the Nikkei though, with the Japanese market closing up 3.5%. The AUD suffered the same whiplash as most sentiment driven currencies yesterday, losing initially and then gaining.
- EUR/CAD: 1.3413 - 1.3486 ▼
- GBP/CAD: 1.5454 - 1.5622 ▼
- AUD/CAD: 0.8625 - 0.8847 ▼
- USD/CAD: 1.3706 - 1.3911 ▼