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CAD firm even as oil falls

Thursday 31 March, 2022

Daily Currency Update

The Canadian dollar was little changed against the US dollar on Thursday, as an initial estimate showed strong signs for the Canadian economy in February offset a fall in oil prices. USDCAD was sitting at 1.2476 at the time of writing. The price of oil, one of Canada's main exports, fell after news that US President Biden would flood the market with an extra 1 million barrels of oil a day from strategic reserves to battle high prices and to put more pressure on Russia to cease its invasion of Ukraine. Gross domestic product rose for the ninth straight month in February, up 0.8% according to a preliminary report from Statistics Canada. The report adds to evidence that the economy has withstood the shocks at the start of 2022 and more reason for the Bank of Canada to continue its plan for a tightening cycle, which the central bank has initiated earlier this month with a 25-basis-point rate hike.

Key Movers

The euro took a tumble against the US dollar on Thursday as peace talks stalled in the Ukraine crisis, and inflation figures from Eurozone countries like Italy, France, Germany and Spain showed elevated price gains. The Eurozone inflation figures for March are due out on Friday. EURUSD was down 0.69%, sitting at around 1.1080 at the time of writing. The US dollar was broadly stronger versus a basket of currencies on Thursday as market sentiment soured around ongoing talks between Russia and Ukraine. The US dollar benefitted from safe haven flows, with the US Dollar Index up 0.45% at around 98.25 at the time of writing. Initial jobless claims rose by 14,000 to 202,000 in the week ending March 26, according to the Department of Labor. The data precedes the official employment report on Friday, which is currently forecast to show the economy added around 500,000 jobs in March and the unemployment rate at 3.7%. US personal spending was weaker than expected in February, falling 0.4% month-over-month after being adjusted for inflation. This suggests the pace of price increases in recent months has tempered some consumer demand.

Expected Ranges

  • EUR/CAD: 1.383 - 1.3979 ▼
  • GBP/CAD: 1.6377 - 1.6452 ▲
  • AUD/CAD: 0.9347 - 0.9391 ▼
  • USD/CAD: 1.2472 - 1.2533 ▼