The Loonie bounces along with crude oil and commodity prices.
Tuesday 4 February, 2020
Daily Currency UpdateCAD - Canadian DollarThe Loonie rose this morning along with commodity prices. The USD/CAD pair fell towards 1.3270 after touching 1.3302 in overnight trading. The Loonie was slightly stronger than the Greenback as commodity currencies such as the Aussie dollar rallied amid expectations that the PBOC will continue to provide significant amounts of liquidity to boost growth in China. Serene capital markets, a bounce in global equity, low volatility, and steadier crude oil prices are helping the loonie to strengthen.
Key MoversThe Aussie dollar erased yesterday and Friday’s losses following the RBA rate announcement, which held rates at 0.75 percent and signaled economic improvement along with keeping virus fears in check. The RBA mentioned in a statement that, “In the short term, the bushfires and the coronavirus outbreak will temporarily weigh on domestic growth.” The RBA said it will keep its easing bias in place, while noting that low borrowing costs have helped the economy and strengthen heavily-indebted households’ balance sheets. The RBA added that strength in labour and property markets gives it room to wait and see how badly a slump will hit the economy and China’s growth. The AUD/USD pair is increasing 0.34 percent at the time of this writing. The British Pound rose 0.18 percent versus the Greenback when market participants were no longer pricing in an interest-rate cut this year by the BOE. One of the positive catalysts came from the construction purchasing managers’ index for January, which came in at 48.4 versus expectations for 47.1. This follows better-than-expected services data last month. Despite PM Johnson’s “free-trade” speech not backing down on his more aggressive stance around trade with the EU, the Pound bounced. Technically speaking, it had a brutal reversal at 2:00 am EST this morning, when the GBP/USD was trading at one-month lows at 1.2941. From there, it has increased around 90 pips and it is trading at 1.3030 at the time of this writing.
- USD/CAD: 1.3274 - 1.3318 ▼
- EUR/CAD: 1.4665 - 1.4720 ▲
- GBP/CAD: 1.7275 - 1.7354 ▲
- AUD/CAD: 0.8923 - 0.8971 ▲
- NZD/CAD: 0.8580 - 0.8602 ▲