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CAD boosted by rally in oil prices

Daily Currency Update

CAD - Canadian Dollar

Even as the US dollar gained across the board on Monday, the Canadian dollar strengthened against its US counterpart thanks to an uptick in oil prices. USDCAD was down 0.31%, trading around 1.2651 at the time of writing.

The price of oil rose to its highest level in six weeks after US output was disrupted by Hurricane Ida and another incoming tropical storm headed to Texas.

The Canadian economy showed signs of improvement as the latest employment release showed an increase in jobs of 90,000 added in August and the unemployment rate declined to 7.1% for the year.

Key Movers

The pound was slightly up against the dollar despite a high number of COVID-19 cases. GBPUSD was trading around 1.3835 at the time of writing. On Tuesday, UK Prime Minister Boris Johnson is scheduled to outline his response to the potential spike in COVID-19 cases during the winter months in order to protect the NHS from being overrun. He is expected to reiterate that he currently sees no reason for further lockdowns, however there may be a period in which people are encouraged to work from home and that protective masks will once again become mandatory in certain areas. The pound could weaken on the back of this announcement as investors become nervous about the knock-on effect of COVID-19 on the UK economy.

EURUSD was down 0.13%, trading at 1.1796 at the time of writing. Some investors think the pair could remain under pressure due to concerns around rising inflation in the US and the Eurozone, as well as uncertainty over the upcoming German elections.

The US dollar edged higher against a basket of currencies on Monday as rising COVID-19 cases helped boost the demand for the safe-haven dollar. The US Dollar Index was up 0.13%, trading around 92.71 at the time of writing. In an attempt to increase vaccination rollout across the US, President Biden is scheduled to address the public around new vaccination rules. Improved US vaccine rollout could improve global risk appetite, as investors look to move their positions from the safety of the US dollar to other, higher yielding commodity currencies.

Expected Ranges

  • EUR/CAD: 1.4916 - 1.4991 ▲
  • GBP/CAD: 1.7501 - 1.756 ▲
  • AUD/CAD: 0.9308 - 0.9344 ▲
  • USD/CAD: 1.2653 - 1.2693 ▲