US dollar extends rally
Monday 9 May, 2022
Daily Currency UpdateThe US dollar extended its rally against a basket of major currencies as uncertainty surrounds the global economic outlook following tighter COVID-19 restrictions in China's two largest cities. The dollar's status as a safe haven currency has also increased with the continuation of Russia's invasion of Ukraine.
The Canadian dollar weakened to its lowest level versus USD in almost five months on Monday. The price of oil, one of Canada's major exports, slumped on Monday as investors digested news from several fronts. Saudia Arabia cut prices in Asia and northwest Europe as tighter lockdowns hit Shanghai and Beijing and the European Union looked to soften its sanctions on Russia. USDCAD was up 0.60% trading at 1.29779 at the time of writing
Key MoversSterling started the week on the backfoot once again. Last week the Bank of England raised rates by 0.25% and raised their inflation forecast to 10% by the last quarter of this year. Furthermore, comments from Bank of England governor Andrew Bailey pointed towards a potential recession in the UK which caused the pound to weaken significantly against USD and EUR. The preliminary GDP data from the UK will be released on Thursday and will give us our first indication of whether a recession is likely. The theme of sterling weakness has continued this week, with GBPUSD dropping to 23-month lows of below the $1.23 handle and GBPEUR followed suit dropping below €1.17.
- EUR/CAD: 1.3585 - 1.3683 ▲
- GBP/CAD: 1.5869 - 1.6026 ▲
- AUD/CAD: 0.9042 - 0.9125 ▼
- USD/CAD: 1.2904 - 1.2989 ▲