Oil prices climb again
Daily Currency Update
CAD - Canadian Dollar
The Canadian dollar was little changed against the US dollar on Monday as oil prices extended its rally and fuelled more inflation concerns. USDCAD was trading around 1.23662 at the time of writing.
Oil prices climbed again on Monday as shortages of natural gas and coal in Asia and Europe are driving unexpected additional demand for oil products in the power generation sector.
The US data releases in the next few weeks are likely to be a far more important watch for investors, as this will be the first month without the $300 employment benefit for many, meaning we could see a drop off in consumer spending and therefore possibly inflation.
Key MoversIn the Eurozone, the euro continues to remain weak, particularly in the face of supply bottlenecks, soaring energy prices, weak economic data and a dovish central bank. The euro could continue its slide against major currencies, at least until the abundance of data releases later in the week such as flash services and manufacturing PMIs, which could have an impact. EURUSD was up 0.06%, trading at 1.16072 at the time of writing.
As more and more central banks globally are alluding to potential interest rate hikes, Bank of England Governor Andrew Bailey is the latest to add fuel to the fire. At a G30 meeting on Sunday, Bailey warned that it “will have to act” to curb inflationary pressure, making no attempt to contradict financial market moves that have priced in the first interest rate increase before the end of the year. The move will likely be positive for the pound, as investors could look at the hike as a sensible option in the face of growing global inflation. GBPUSD was down 0.13% at 1.3731 at the time of writing.
The Australian dollar found its feet last week on the back of upbeat equity market movements which in turn were spurred on by better-than-expected quarterly earnings and retail sales figures in the US. AUDUSD edged lower today, trading around 0.7400 after China’s GDP reading expanded 4.9%, down from 7.9% in the previous quarter and largely in line with expectations.
- EUR/CAD: 1.4333 - 1.4387 ▲
- GBP/CAD: 1.6973 - 1.7039 ▼
- AUD/CAD: 0.9153 - 0.9192 ▼
- USD/CAD: 1.2352 - 1.2408 ▲