Home Daily Commentaries Canadian dollar continues its oscillation, oil drops further

Canadian dollar continues its oscillation, oil drops further

Daily Currency Update

Canadian dollar was seen extending its gains yesterday after the jobs data. USD/CAD pair edges higher on Tuesday and for now, seems to have cracked a two-day losing streak to its lowermost levels since Nov, 25, 2022.

Low to moderate action around crude oil prices, amidst mixed economic indications, fails to provide any stimulus to the commodity linked dollar. Though the latest optimism over China’s biggest pivot away from its strict zero-COVID policy did lend some support to the black gold. That said, worries that a deeper global economic slump will hurt fuel demand restricts any meaningful upside for oil prices. There were no major market-moving economic releases, either from the US or Canada.

Oil prices were little changed on Tuesday, giving up some of the gains from the previous session. Markets are awaiting more clarity on the FED’s plans for rate hikes to gauge the impact on the economy and fuel demand. Last seen trading at 74.66 levels.

Key Movers

The World Bank announced on Tuesday that it expects the global economy to grow by 1.7% in 2023, down sharply from 3% in June's forecast. Growth outlook dimmed by effects of monetary tightening, slowdowns in US, Eurozone, China and Ukraine war spillovers.

World Bank sees Eurozone GDP flat in 2023 vs 1.9% growth in June forecast due to soaring energy costs, rising borrowing costs.

China's 2022 growth slowed to 2.7% due to COVID lockdowns but will recover to 4.3% for 2023.

EUR/USD is swiftly seen to rebound to 1.075 levels as the USD was notably seen to weaken.

GBP/USD too has shown a rebound and was noted to rise above 1.2170 levels in the second half of the UK trading hours (last seen trading at 1.2147 levels). The modest gains observed in Wall Street's main indexes following the opening bell seems to be restricting the USD’s upside.

Expected Ranges

  • EUR/CAD: 1.1358 - 1.4416 ▲
  • GBP/CAD: 1.6251 - 1.6338 ▲
  • AUD/CAD: 0.9205 - 0.9289 ▼
  • USD/CAD: 1.336 - 1.3439 ▲