Daily Currency Update

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A positive tone and a rally in equity markets trigger profit-taking in the US dollar.

USD - United States Dollar

The US dollar falls following a stock market rally. One of the important catalyst was the release of US President Joe Biden’s fiscal plan, which has sparked gains in emerging-market and commodity-linked currencies. Historically, April is the best month for the stock market in North America, so market participants might be positioning in preparation (stocks posted an average gain of 2.4% in April from 2000 to 2020, and they’ve risen in 13 of the last 15 Aprils).

On the economic release front, pending home sales fell 10.6% versus an estimated decrease of 3%.

Key Movers

The Loonie increased the most in two weeks as the US dollar has fallen due to the positive risk mode in the financial markets.

The USD/CAD pair fell to 1.2539, the lowest level since March 23. Another support is 1.2516 (which is the March 23 low). The EUR/CAD pair also slumped as much as 0.5% to the lowest level since February 2020. Technically speaking, there is a resistance at 1.2652, which is the 55-day moving average.

On the economic release front, Canada’s economy continued showing surprising strength at the start of the year, despite a second wave of closures that forced many businesses to shut their doors again. Gross domestic product grew 0.7% in January, according to Statistics Canada.

Expected Ranges

USD/CAD: 1.2515 - 1.2592 ▼

EUR/USD: 1.1700 - 1.1760 ▼

GBP/USD: 1.3770 - 1.3819 ▲

AUD/USD: 0.7589 - 0.7630 ▼

NZD/USD: 0.6972 - 0.7008 ▼