Home Daily Commentaries Drop in oil weighing on the CAD ahead of major US releases

Drop in oil weighing on the CAD ahead of major US releases

Wednesday 23 November, 2022

Daily Currency Update

A drop in oil is seeing the Canadian dollar give up some of the gains it saw in yesterday’s North American trading.  The price of WTI has come back under $80 a barrel, getting back into the $78 range over night.  The Canadian dollar however is receiving some support from rising equities markets and a general risk appetite. With a lack of Canadian data this week, the CAD will continue to follow broader market trends.

Key Movers

The USD is holding position against most other major currencies and up against some ahead of some key data today.  Starting the day will be the release of Durable Goods Orders for October which are expected to be up 0.4%.  These are higher priced, longer lasting goods that require some expendable income to buy.  Markets could see this as a good measure on the temperature of American consumers heading into the holidays. Later this morning, we have the weekly Oil Inventory print with debate raging in the last week on the price of diesel and heating fuels. Later in the day will see the release of the minutes of the last Fed meeting. Investors will be looking for clues as to what the next move from the FOMC might be. The GBP saw mild gains overnight as the manufacturing PMI data came in at 46.2, beating the expected drop to 45.8.  This caused a brief spike on the pound versus the dollar. The euro also benefitted from a positive PMI print in its biggest economy.  The German Index improved to 46.7 over an expected 45.  This did little though to help the euro as a bearish sentiment is settling in as the ECB seems focused on not supporting a 75-basis point hike at its next rate announcement. In Asia Pacific, the Royal Bank of New Zealand caused a whipping effect higher on the NZD after they raised rates by 75 points overnight.  In its statement, the bank noted that inflationary pressures are running too high and prices need to come down to a more sustainable level.

Expected Ranges

  • EUR/CAD: 1.3753 - 1.3873 ▲
  • GBP/CAD: 1.5887 - 1.6076 ▲
  • AUD/CAD: 0.8879 - 0.8932 ▲
  • USD/CAD: 1.336 - 1.3424 ▲