The Canadian dollar is under pressure to start today’s session. USD/CAD climbed steadily after touching $1.4002 in early Asia hours, rising to $1.4050 when Toronto opened. Prices accelerated higher, reaching $1.4075 when West Texas Intermediate (WTI) oil prices dropped from $27.40U.S./b to $24.99/b. The move was precipitated by a headline stating Russian President Vladimir Putin didn’t have any plans to talk to President Trump, or Saudi Arabia rulers.
If true, it crushes hopes for the Organization of the Petroleum Exporting Countries and Russia agreeing to a new production cut strategy today.
WTI fully recovered from yesterday’s selloff when the U.S. Energy Information Administration said that U.S. crude inventories rose 15.2 million barrels in the week ending April 3. The result wasn’t a surprise due to the number of Americans self-isolating and not driving.
Traders are scrambling to buy greenbacks ahead of the Easter long weekend, in a "rather-be-safe-than-sorry" move. The U.S. death toll from the COVID-19 outbreak climbed to 14,768 between February 29 and April 8. There are over 430,000 confirmed cases, suggesting that optimism about the outbreak reaching a plateau in the U.S. was misplaced. Elsewhere, France and the U.K. are considering extending their mandatory lockdowns. Canada has over 19,000 confirmed cases, and the death toll reached 435.
The minutes from the March 2 and March 15 U.S. Federal Open Market Committee (FOMC) meetings were released to little fanfare yesterday.
The Fed appeared to be surprised at the magnitude of the economic impact from the pandemic, which is why their actions appeared so decisive. Fed Chair Jerome Powell’s speech will give markets get fresh insight into the Fed’s outlook today.
EUR/USD is trading sideways, albeit with a modestly negative bias. European Union Finance ministers have yet to reach an agreement on fiscal stimulus plans to support the eurozone economy. EUR/USD is drifting in the middle of is $1.0842-$1.0889 overnight range.
U.S. jobless claims data for the week ending April 3 are due this morning, and the forecast is for job losses exceeding 5.2 million. The news should not have much impact on FX markets as the sheer volume of layoff announcements suggests the results are priced in.
Canada’s March employment report is expected to show a jump in the unemployment rate to 7.2% from 5.6% in February, while job losses exceed 350,000. The news is outdated and shouldn’t have much effect on Canadian dollar trading.
Have a great and safe holiday weekend. The daily will resume on April 14.
Rahim Madhavji is the President of KnightsbridgeFX.com, a Canadian currency exchange that provides better rates than the banks to Canadians
