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Global oil prices jump again

Daily Currency Update

The Canadian dollar climbed against major peers on Monday as oil prices jumped again on reports that the European Union would join the United States in a Russian oil embargo. USDCAD was at 1.2585 at the time of writing.

This week, investors are looking to hear from central bank policymakers on their economic outlook, starting with comments from US Federal Chair Jerome Powell today at 12 p.m. eastern in Washington, DC. The US dollar retreated towards the end of last week despite the US Federal Reserve raising interest rates by 25 basis points for the first time since the pandemic began. The fact that the US dollar did not strengthen too much, suggests that the interest rate hike had already been priced into the market prior to the announcement. Over the weekend Federal Governor Christopher Waller put the market firmly on notice for a 50bps rate hike in the coming months, explaining it was only the uncertainty around the Ukraine crisis that persuaded him to vote for a 25bps hike last week. The US Dollar Index was little changed Monday morning, trading around 98.29 at the time of writing.

Key Movers

The global economy is facing an incredible amount of uncertainty at the moment which is continuing to drive the volatility we’re seeing in financial markets.

The euro made major gains against the US dollar last week rising by 1.23%, its first weekly gain versus the US dollar since January. The euro was slightly down against USD this morning, trading around 1.1038 at the time of writing. European Central Bank President Christine Lagarde is due to speak at an online summit on Tuesday morning.

Last week the Bank of England raised interest rates once more by 25 basis points, raising the rate from 0.5% to 0.75% in response to rising inflation in the UK. The pound did not rise in the way that many anticipated, largely due to the cautious comments that followed the hike regarding the Russia-Ukraine crisis. This week, there are several events that could impact the pound - including the UK budget announcement, inflation data and retail sales. GBPUSD was up 0.13% at 1.3197 at the time of writing.

Expected Ranges

  • EUR/CAD: 1.389 - 1.3961 ▼
  • GBP/CAD: 1.656 - 1.6629 ▼
  • AUD/CAD: 0.9306 - 0.9351 ▼
  • USD/CAD: 1.2584 - 1.2619 ▼