Dollar losing ground amid sell off in equities and oil
Monday 30 January, 2023
Daily Currency UpdateThe Canadian dollar is on the backfoot this morning against the USD as equities markets and oil trade down. A sell off in oil on Friday has WTI prices back to the $78 a barrel range. This is down from the $82 a barrel price and all North American equities markets are trading lower pre-open. With a lack of significant data in Canada this week, the dollar will be at the mercy of market sentiment.
Key MoversThe USD is sticking to the range we saw late last week ahead of the Federal Open Market Committee (FOMC) interest rate announcement on Wednesday. The Fed is expected to hike rates by an additional 25 basis points. Several other central banks will be meeting this week, including both the ECB and Bank of England on Thursday. The market consensus is that both banks will hike rates by 50 points to battle inflation. This combination of rate hikes and inflation could provide some volatility to the currency markets this week. After Asian and European markets traded down overnight, the North American markets are pointing towards a lower open. Mainland China is back to work today after taking last week off to celebrate the lunar new year. Asian markets started the sessions out strong but fell throughout the day. German GDP fell off in the fourth quarter, surprising investors during the European session after a positive outlook in recent confidence surveys. Overall output fell -0.2% during the quarter instead of the market expectation of a flat output.
- EUR/CAD: 1.4460 - 1.4538 ▲
- GBP/CAD: 1.6481 - 1.6539 ▲
- AUD/CAD: 0.9429 - 0.9470 ▼
- USD/CAD: 1.3301 - 1.3348 ▲