Canada’s Emergency Legislation of $82 Billion Passed by the House of Commons
Wednesday 25 March, 2020
Daily Currency UpdateCAD - Canadian DollarThe House of Commons has passed a bill in the wee hours this morning to free up $82 billion in needed emergency funding for Canadians to receive financial help through the COVID-19 pandemic. The House of Commons was suspended quickly after it had begun Tuesday when opposition leaders balked at provisions that would have given Liberals sweeping powers on spending, borrowing, and taxes without Parliamentarian approval just shy of 2 years. With the latter omitted the bill has now moves to the Senate to approve the measure. The Canadian dollar mustard up significant gains across its trading peers after the news that the emergency financial aid bill had been passed. The loonie against the greenback overnight traded through first support of 1.4388 (0.6950) and reached 1.4296 near the 0.70 cent US threshold. The currency pair is now trading back at the 1.4366 just ahead of the equity markets in North America opening. Stock markets are pointing to a mixed open with the Dow pointing higher and the S&P 500 selling off. WTI oil is trading -2.62% lower to trade at 23.36 dollars per barrel, while gold is losing its luster from yesterdays gains by -1.22% trading at 1616.30 an ounce.
Key MoversThe US dollar fell against the majority of significant counterparts through trade on Tuesday as investors responded to the unprecedented stimulus measures enacted by the Federal Reserve on Monday. Emboldened markets drove equities higher and began unwinding last week's panic led liquidity push forcing the world's base currency index lower for the first time in the previous 11 days. With the pace of spread across Europe slowing this week, the US, in particular, New York City, has emerged as the new epicentre in the ongoing battle against COVID19. The US has been criticized as being to slow to react to the threat of the coronavirus and modelling suggest the health impact within the States could outstrip hotspots in Italy, Spain and even China.The Great British Pound was the days' big mover, bouncing back against the USD and testing moves through 1.18. Having touched a 35 year low last week, sterling found support in a renewed demand for risk and a broader softening in the USD. The GBP remains vulnerable to broader risk sentiment swings with is ballooning current account deficit making it particularly vulnerable to risk-off moves.Attentions remains squarely affixed to the COVID19 pandemic. While we anticipate most currency will recoup much of the losses suffered against the USD in time, the world's base currency will continue to find support as long as the pandemic continues. The pace of spread across the globe remains mostly unchecked.
- USD/CAD: 1.4294 - 1.4461 ▼
- EUR/CAD: 1.5474 - 1.5609 ▼
- GBP/CAD: 1.6861 - 1.7169 ▼
- AUD/CAD: 0.8560 - 0.8688 ▼
- NZD/CAD: 0.8345 - 0.8458 ▼