Home Daily Commentaries CAD follows oil down on China concerns

CAD follows oil down on China concerns

Daily Currency Update

The Canadian dollar is looking to start the week down against its US counterpart.  Sweeping uncertainty in China has caused a downturn to the outlook for needs of materials like oil.  The WTI index has hit a new low for 2022, falling under $74 a barrel at one point.

Key Movers

After a weekend that saw protesters in China calling for the resignation of President Xi, markets are starting the week on a down trend.  The USD is outperforming all the majors aside form yen and euro heading into North American trading.  Riskier assets are selling off as well, with Oil down under $74 a barrel.  Key data points come later in the week with PCE inflation on Thursday followed by the monthly non-farm payrolls data.

Asian and European markets were dominated by concerns about China’s ongoing Covid-19 Policies and the impact they are likely to have on the global economy. Protests throughout the weekend called for the pull back of restrictions and the resignation of President Xi Jinping. Hong Kong’s Hang Seng index was down 2%. The worst result in the overnights. The AUD took the biggest hit of the APAC currencies due to Australia’s dependence on Chinese requirements for resources.

The euro rallied in European sessions after losing ground to the USD in Asian markets.  Some positive data from the Euro Zone combined with a renewed Hawkish tone from the ECB’s Christine LaGarde also seems to be bolstering the world’s second biggest currency.

Expected Ranges

  • EUR/CAD: 1.3893 - 1.4080 ▲
  • GBP/CAD: 1.6157 - 1.6285 ▲
  • AUD/CAD: 0.8978 - 0.9024 ▼
  • USD/CAD: 1.3392 - 1.3469 ▲