Home Daily Commentaries The Loonie continues its rally along with crude oil prices

The Loonie continues its rally along with crude oil prices

Daily Currency Update

CAD - Canadian DollarThe Loonie continues in a counter-trend rally, pushing the USD/CAD pair to new lows from March 21st (stronger Loonie). The only factor to make the Loonie stronger is the price of crude oil (crude oil is having a new high from November 1st), because the housing starts and building permits came in with disappointing numbers, but it was largely ignored. Crude oil high prices might make the BoC less dovish. Regarding crude oil, it continues to rise along with the escalation of fighting in Libya and Trump saying he would designate Iran’s Revolutionary Guard as a terrorist group. Furthermore, the OPEC meeting in Vienna might have some impact on crude prices, as Saudi Arabia, could use the opportunity to signal its enthusiasm to extend the OPEC output cut, which should impact the direction of the Loonie. The economic releases for Canada are very light this week, with the next highlight being Deputy Governor Wilkins’ speech on Thursday, but it will not likely have a significant impact. Technically speaking, the USD/CAD pair should have a resistance at 1.3340 and a support at 1.3280.

Key Movers

The CAD/EUR is decreasing 0.15 percent this morning after yesterday’s headlines. According to Bloomberg, the ECB committees are not discussing ahead of Wednesday’s meeting. The European Central Bank Rate Decision is tomorrow and some are not happy with Draghi’s comment on negative rates, as it could send a message that rates could stay low for much longer or even signal a cut. The ECB officials are not in a hurry to renovate their negative interest-rate policy, despite Mario Draghi’s suggestion to look into the matter. The CAD/GBP is flat this morning. May is due to meet both the French and German leaders today in an attempt to get them both onside before all EU 27 vote on the PM's request tomorrow to delay Brexit to June 30th. Meanwhile, a bill was passed in Parliament yesterday evening, which means the PM is forced to request an extension should there be no agreement on a deal. However, it's already happening, and so the reaction in markets to the bill passing was muted.

Expected Ranges

  • USD/CAD: 1.3280 - 1.3340 ▼
  • CAD/EUR: 0.6650 - 0.6671 ▼
  • CAD/GBP: 0.5738 - 0.5779 ▼
  • CAD/AUD: 1.0498 - 1.0539 ▼
  • CAD/NZD: 1.1075 - 1.1143 ▼