The Loonie erased its gains in yesterday’s trading session, and this morning it continued to fall. The USD/CAD is rising 0.23 percent this morning (weaker Loonie) along with a flat US dollar. The reason? Crude oil has fallen 1 percent this morning and market participants are ignoring the better manufacturing sales that came in at 1 percent versus the 0.4 percent expected; they are probably looking at the bigger picture here.
Regarding bigger pictures, Governor Carolyn Wilkins of the Bank of Canada set the bearish tone for the Loonie when she spoke yesterday at UBC’s Vancouver School of Economics and CFA Society Vancouver, noting the risk from elevated household, government and corporate debt in different places around the world. She mentioned, “…whether you are a homeowner or a businessperson, you know first-hand that high leverage can leave you in a vulnerable financial position,” and added, “it’s no different for economies.” Wilkins also said that the biggest threat to global growth right now is trade wars.
Technically speaking, the USD/CAD pair is still on an uptrend, and it has increased 0.63 percent from the lowest level on March 13. The support and resistance levels for today are 1.3350, 1.3335 and 1.3380, 1.3395, respectively. It is trading at 1.3355 at the time of this writing.