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US Dollar Continues to Slip against Canadian Dollar as ?Loonie? Sentiment Strengthens
Published: 4 Jul at 1 PM Tags: Euro Exchange Rate, Dollar Exchange Rate, Currency Exchange, Canadian Dollar Exchange Rate, Euro Crisis, UK, Exchange Rates, Economy,
The US Dollar has continued to drop from last week’s highs against the Canadian Dollar as markets slowly returned to risky currencies following Britain’s shocking vote to leave the EU. Stable prices of oil have also helped the Canadian Dollar to maintain its levels.
US Dollar (USD) Sentiment Continues to Slip from Brexit-Inspired Highs
The US Dollar climbed to new highs against many of its rivals last week in response to news that Britain had voted to Leave the European Union. The shock led markets away from risky currencies like the Canadian Dollar towards ‘safe-haven’ currencies like the ‘Greenback’.
USD/CAD reached a monthly high of 1.3115 last Monday, but has since slipped as sentiment towards risky gradually returned from their worst levels.
At the time of writing, the US Dollar to Canadian Dollar exchange rate was trending in the region of 1.2860, and was down around -0.4% on the week’s opening levels of 1.2904.
Investors have also remained wary of the US Dollar due to mixed views from Federal Reserve policymakers, and the radio silence from Fed Chairwoman Janet Yellen.
Fed Vice Chairman Stanley Fischer indicated on Friday that the Fed would continue with a wait and see approach to economic health, confirming to some investors that a July interest rate hike was no longer on the cards. He also confirmed that there were no plans to attempt negative rates.
‘One of the things you learn if you're a central banker is never say never, but if there's one thing we don't want to do, we have no plans to move into negative territory and we will try to avoid ever getting to that position’.
These comments were slightly different in tone to those made by St. Louis Fed President James Bullard. Bullard stated that he thought the Brexit’s affect on the US economy would be close to zero.
Canadian Dollar (CAD) Pushes Down ‘Greenback’
The Canadian Dollar has continued to recover from late June’s Brexit-inspired risk-lows over the last week. Investors returned to risk-correlated currencies like the ‘Loonie’ due to hopes that their respective nations would be less effected by the UK’s Brexit news.
Canadian data was also largely positive last week, which may have assisted CAD’s recovery but is unlikely to have been focused on too heavily by markets due to it being data collected before the Brexit announcement.
Canada’s April Gross Domestic Product (GDP) beat expectations of 1.4% by improving from 1.2% to 1.5% year-on-year. The monthly score improved from -0.2% to 0.1% as expected.
The latest developments in oil prices have also helped the oil-correlated Canadian Dollar to sturdy its position.
Oil prices remained strong over the weekend according to Bloomberg, which reported that brent crude oil had remained near US$50 per barrel due to militant attacks affecting production in Nigeria.
USD/CAD Expected to Experience Stronger Tuesday Movement
Movement in the US Dollar to Canadian Dollar exchange rate is likely to be comparatively muted during Monday’s US session, as US markets remained closed to observe the Independence Day bank holiday.
As a result, US traders are likely to adjust to any Monday movement in USD/CAD when US markets open on Tuesday.
The Canadian Dollar may see its rally end in the coming days due to fears that Canada’s oil industry could be hindered by a law currently being contested in Canadian courts, according to a report by CNBC.
‘The Enbridge Northern Gateway pipeline was originally approved by the Conservative government back in 2014, subject to a whopping 209 conditions. But according to Court of Appeal documents released Thursday, the government failed to adequately consult with aboriginal communities directly impacted by pipeline and tanker routes.’
The next step for the issue is to be discussed in Canadian parliament. Canada’s Prime Minister Justin Trudeau previously indicated that he would oppose the route in favour of protecting environmental areas as well as indigenous communities.
US Markets are likely to continue to hope for statements from Fed Chairwoman Janet Yellen on the possible effect of the UK Brexit situation. Any speech like this is likely to cause considerable risk-related movement.
At the time of writing, the US Dollar to Canadian Dollar (USD/CAD) exchange rate trended in the region of 1.2863, while the Canadian Dollar to US Dollar (CAD/USD) exchange rate traded at around 0.7770.
US Dollar (USD) Sentiment Continues to Slip from Brexit-Inspired Highs
The US Dollar climbed to new highs against many of its rivals last week in response to news that Britain had voted to Leave the European Union. The shock led markets away from risky currencies like the Canadian Dollar towards ‘safe-haven’ currencies like the ‘Greenback’.
USD/CAD reached a monthly high of 1.3115 last Monday, but has since slipped as sentiment towards risky gradually returned from their worst levels.
At the time of writing, the US Dollar to Canadian Dollar exchange rate was trending in the region of 1.2860, and was down around -0.4% on the week’s opening levels of 1.2904.
Investors have also remained wary of the US Dollar due to mixed views from Federal Reserve policymakers, and the radio silence from Fed Chairwoman Janet Yellen.
Fed Vice Chairman Stanley Fischer indicated on Friday that the Fed would continue with a wait and see approach to economic health, confirming to some investors that a July interest rate hike was no longer on the cards. He also confirmed that there were no plans to attempt negative rates.
‘One of the things you learn if you're a central banker is never say never, but if there's one thing we don't want to do, we have no plans to move into negative territory and we will try to avoid ever getting to that position’.
These comments were slightly different in tone to those made by St. Louis Fed President James Bullard. Bullard stated that he thought the Brexit’s affect on the US economy would be close to zero.
Canadian Dollar (CAD) Pushes Down ‘Greenback’
The Canadian Dollar has continued to recover from late June’s Brexit-inspired risk-lows over the last week. Investors returned to risk-correlated currencies like the ‘Loonie’ due to hopes that their respective nations would be less effected by the UK’s Brexit news.
Canadian data was also largely positive last week, which may have assisted CAD’s recovery but is unlikely to have been focused on too heavily by markets due to it being data collected before the Brexit announcement.
Canada’s April Gross Domestic Product (GDP) beat expectations of 1.4% by improving from 1.2% to 1.5% year-on-year. The monthly score improved from -0.2% to 0.1% as expected.
The latest developments in oil prices have also helped the oil-correlated Canadian Dollar to sturdy its position.
Oil prices remained strong over the weekend according to Bloomberg, which reported that brent crude oil had remained near US$50 per barrel due to militant attacks affecting production in Nigeria.
USD/CAD Expected to Experience Stronger Tuesday Movement
Movement in the US Dollar to Canadian Dollar exchange rate is likely to be comparatively muted during Monday’s US session, as US markets remained closed to observe the Independence Day bank holiday.
As a result, US traders are likely to adjust to any Monday movement in USD/CAD when US markets open on Tuesday.
The Canadian Dollar may see its rally end in the coming days due to fears that Canada’s oil industry could be hindered by a law currently being contested in Canadian courts, according to a report by CNBC.
‘The Enbridge Northern Gateway pipeline was originally approved by the Conservative government back in 2014, subject to a whopping 209 conditions. But according to Court of Appeal documents released Thursday, the government failed to adequately consult with aboriginal communities directly impacted by pipeline and tanker routes.’
The next step for the issue is to be discussed in Canadian parliament. Canada’s Prime Minister Justin Trudeau previously indicated that he would oppose the route in favour of protecting environmental areas as well as indigenous communities.
US Markets are likely to continue to hope for statements from Fed Chairwoman Janet Yellen on the possible effect of the UK Brexit situation. Any speech like this is likely to cause considerable risk-related movement.
At the time of writing, the US Dollar to Canadian Dollar (USD/CAD) exchange rate trended in the region of 1.2863, while the Canadian Dollar to US Dollar (CAD/USD) exchange rate traded at around 0.7770.
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Source: moneytransfer.co.uk