A busy day ahead on the economic calendar puts the EUR, the Loonie, and the U.S Dollar in focus. Early in the day, China Premier Li Keqiang’s speech will draw interest…
OPEC+ extended current production cuts and provided major support to commodity-related currencies.
The Canadian dollar edged lower against its U.S. counterpart on Thursday, pulling back from an earlier one-week high as a sell-off on Wall Street driven by higher bond yields offset surging oil prices. The safe-haven U.S. dollar rallied against a basket of major currencies and Wall Street slumped after remarks from Federal Reserve Chair Jerome Powell disappointed investors worried about rising longer-term U.S. bond yields. "Canadian dollar traders' heads were spinning today in attempting to digest OPEC and Powell at the same time," said Adam Button, chief currency analyst at ForexLive.
Canadian dollar forecasts for the coming months have been raised by strategists, reflecting recent gains for the currency but also expectations commodity prices will benefit from the reopening of the global economy, a Reuters poll showed. Canada is a major producer of commodities, including oil, which has soared about 80% since November, helped by supply cuts from major producers and the prospect of stronger global economic growth this year as COVID-19 vaccines roll out. The United States expects to have enough vaccine for every American adult by the end of May. Canada's vaccination campaign is also ramping up after earlier supply disruptions.
USD/CAD failed to settle above the 20 EMA and pulled back towards the support at 1.2590.
The Canadian dollar was little changed against its broadly stronger U.S. counterpart on Wednesday, holding on to this week's gains as oil prices rose and domestic data showed the value of building permits scaling a record high in January. Canada's "strong" GDP data and the rally in oil prices have helped underpin the Canadian dollar, said George Davis, chief technical strategist at RBC Capital Markets. The price of oil, one of Canada's major exports, settled 2.6% higher at $61.28 a barrel, boosted by a huge drop in U.S. fuel inventories and expectations that OPEC+ producers might decide against increasing output when they meet this week.
It’s a busy day ahead on the economic calendar. Economic data from the U.S will draw plenty of interest, with service sector PMIs from the Eurozone also in focus.
USD/CAD managed to settle below the support at 1.2665 and is testing the next support at 1.2625.
The Canadian dollar strengthened against its U.S. counterpart on Tuesday, adding to sharp gains from the day before, as financial market volatility caused by higher bond yields faded and domestic data showed faster-than-expected economic growth. The loonie was trading 0.3% higher at 1.2611 to the greenback, or 79.30 U.S. cents, having traded in a range of 1.2600 to 1.2698. "I think essentially the mini tantrum we had in the bond market last week has calmed down a little bit," said Shaun Osborne, chief currency strategist at Scotiabank.
It’s a relatively busy day on the economic calendar, with the EUR and Loonie in focus. First up, however, is the RBA monetary policy decision later this morning.