Daily Currency Update

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The Greenback falls after central banks around the world improve liquidity in a coordinated effort.

USD - United States Dollar

The Fed continues to improve U.S. dollar liquidity by providing U.S. dollar funding. At the same time, the Fed announced coordinated central bank line enhancements; these central banks have agreed to increase the frequency of 7-day maturity operations from weekly to daily. These daily operations will commence on Monday, March 23, 2020, and will continue at least through the end of April.

The coordinated central bank efforts between the Fed and 9 central banks, including the RBA ($60bn) and RBNZ ($30bn), is one factor for somewhat less volatile FX markets overall, and a modestly softer U.S. dollar. Other central banks included in the swap line facilities are Banco Central do Brasil, Danmarks Nationalbank, Bank of Korea, the Banco de Mexico, Norges Bank, Monetary Authority of Singapore, and Sveriges Riksbank.

This Covid-19 virus lockdown might mean a hard stop for the U.S. economy. Economic growth in the second quarter might bring a steep contraction in U.S. history, and probably surpass the worst period of the financial crisis in 2008.

Key Movers

The USD/CAD is falling 1.61 percent after crude oil rallied and global stock market seems forming a bottom, which does not mean economic news will improve for the Canadian economy, which might start to show very weak numbers in the following weeks after the COVID-17 virus created a global health crisis.

Crude oil rallied as president Trump got involved into the price war between Saudi Arabia and Russia. At the same time Texas regulator proposed his state could coordinate output cuts with the producers.

A few minutes ago Canada January retail number came in at 0.4 percent versus 0.3 percent expected, month to month. However e-commerce sales were C$ 1.66 billion in January up 9.8 percent from a year earlier and representing 3.7 percent of total retail sales.

Expected Ranges

USD/CAD: 1.4150 - 1.4348 ▼

EUR/CAD: 1.5157 - 1.5316 ▼

GBP/CAD: 1.6550 - 1.6999 ▲

AUD/CAD: 0.8245 - 0.8448 ▲

NZD/CAD: 0.8020 - 0.8294 ▼