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CAD rebounds after small dip

Thursday 20 May, 2021

Daily Currency Update

CAD - Canadian DollarThe Canadian dollar rebounded today after a sharp fall in commodity prices and a brief flock to USD pulled it down from its recent highs yesterday. USDCAD traded 0.4% lower at 1.207 at the time of writing. Despite domestic data showing inflation climbing at the fastest pace in 10 years and a higher unemployment rate in April, the Canadian dollar remained the outperformer among its G10 peers for the month. Bank of Canada governor Tiff Macklem is set to hold a press conference today on the latest Financial System Review. Investors will be paying close attention for comments about inflation or concerns about overheating housing markets.

Key Movers

The euro and the pound recovered slightly today after drifting lower yesterday, as investor reaction to the Fed’s meeting minutes drove up demand for the US dollar. EURUSD and GBPUSD were both up around 0.2% this morning at 1.220 and 1.415 respectively. Attention now turns to a host of European and US PMI data prints on Friday. PMI data provides a valuable insight into input costs and potential ongoing inflation pressures.The AUD fell nearly 1% yesterday as commodity prices came under pressure following commentary from China, wherein it warned about the current outperformance and called for stricter market oversight. Copper fell some 3% while oil gave up 5%, forcing the AUD toward 0.7750. The Fed’s meeting minutes drove the USD higher and drove the AUD down toward intraday lows at 0.7710. AUDUSD was up 0.5% at 0.7763 this morning. Demand for the US dollar advanced across the board yesterday after minutes from the Federal Reserve’s latest policy meeting showed that some policymaker's commitments to accommodative monetary policy was beginning to falter. But the bounce was short-lived. The dollar index, which measures demand for USD against a basket of currencies, was down 0.3% at 89.92 this morning.

Expected Ranges

  • EUR/CAD: 1.474 - 1.481 ▼
  • GBP/CAD: 1.708 - 1.714 ▼
  • AUD/CAD: 0.935 - 0.939 ▲
  • USD/CAD: 1.207 - 1.214 ▼