Crude demand still down
Thursday 10 September, 2020
Daily Currency UpdateDemand for crude oil in the US increased for just the third time in two months.
As US crude oil inventories decrease, US buyers turn to Canada fill oil inventories and it impacts the USDCAD pricing. Crude oil inventories is the gauge of supply and demand imbalances in the market.
But with little of note driving the market movements, it is clear sentiment continued to govern direction. Underlying macroeconomic fundamentals have taken a back seat and investors have responded to headlines rather than data sets.
We’d expect a heightened likelihood of ongoing volatility across currency markets as we move into the final quarter of the year.
Key Moversuropean Central Bank announced this morning that it will not cut rates in the short term. It will hold the monetary policy option as a backup in the medium term in case the continent is required to once again fully lockdown. Ideally for ECB President Christine Lagarde, Q3 will bring with it a spread of better data, and will restore some confidence into the bloc. A 10-basis point cut has already been priced into the market for 2021, however this may not be needed.
The Australian dollar rallied through trade on Wednesday, recouping losses and pushing back toward 0.73 US cents. Having struggled to maintain any upward momentum throughout the domestic session the risk-off backdrop abated overnight allowing the Australian dollar to follow equities and other risk assets higher. Having touched intraday lows below 0.72 the AUD pushed through 0.7250 to touch 0.7290.
- EUR/CAD: 1.551 - 1.565 ▼
- GBP/CAD: 1.692 - 1.714 ▲
- AUD/CAD: 1.040 - 1.046 ▲
- USD/CAD: 0.759 - 0.761 ▼