Home Daily Commentaries OPEC production benefits CAD

OPEC production benefits CAD

Daily Currency Update

With Russia and Saudi Arabia closer than ever on the price of oil, OPEC+ hinted that production would be limited. The news rippled into North America. The price of WTI crude climbed 1.6% to over $62 barrel. In turn, weakening demand for the USD allowed USDCAD to dip toward 1.26, its lowest level in 7 days.

Key Movers

URUSD again dropped towards the 1.20 handle as equity markets around the world show a mixed picture of losses and gains. The euro managed to fend off a play to break below 1.20 earlier this week so it will be interesting to see if the key level can be held again given the backdrop of the slow vaccine roll out from the EU.
Yesterday UK Chancellor of the Exchequer Rishi Sunak unveiled the latest budget. It continued spending to support and rebuild an economy reeling from the coronavirus pandemic. Some of the main measures included an extension to the job furlough scheme through to September; a six-month extension to the £20 increase in Universal Credit; support for the self-employed extended through to September, and a rise in the minimum wage to £8.91. GBP was little moved by the Budget as most of the main details had been revealed beforehand, so GBPUSD continued to trade between 1.39 and 1.40. GBPEUR is also within recent ranges trading at 1.1580.
Attentions returned to price action across bond markets overnight with rates again showing significant gains prompting a sell off across equities and a broader risk-off shift. Having touched intraday highs at 0.7840 on the back of a strong Q4 GDP print, the AUD drifted back below 0.78 US cents as UK bonds let rates drift higher following a larger than expected debt issuance. Elevated rates again prompted investors to adopt a measured approach as a cautious tone permeated markets and forced the AUD toward intraday lows at 0.7775. Having edged upward into this morning’s open, the AUD currently buys 0.7790 US cents.

Expected Ranges

  • EUR/CAD: 1.516 - 1.527 ▲
  • GBP/CAD: 1.761 - 1.763 ▲
  • AUD/CAD: 0.982 - 0.987 ▲
  • USD/CAD: 1.258 - 1.267 ▲