USDCAD news - page 31
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USD/CAD: Loonie Climbs on Oil-Triggered Rally, Hits 9-Month High The USD/CAD pair tumbled 0.82% and traded at C$1.2790, marking the lowest level since July.
Higher crude prices dominated the market on Tuesday and supported the resource-linked loonie. Futures for WTI jumped 3.02% to trade at $41.58 per barrel, while Brent contracts advanced 3.55% to $44.35 per barrel.
Analysts say that as long as oil stands above the $40 level, the short term bullish market should push prices up to the $41.87-$42.73 level.
"The loonie's rebound has been tied to both oil prices and a more dovish sounding Fed. However, with a meaningful oil price rally only coming later in the year and the market underpriced for Fed rate hikes, the C$ should lose ground as we head into the middle of the year," CIBC Capital Markets said in a note.
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Full text of the Bank of Canada rate decision Bank of Canada rate decision text April 13, 2016:
Bank of Canada maintains overnight rate target at 1/2 per cent
The Bank of Canada today announced that it is maintaining its target for the overnight rate at 1/2 per cent. The Bank Rate is correspondingly 3/4 per cent and the deposit rate is 1/4 per cent.
Growth in the global economy is expected to strengthen gradually from about 3 per cent in 2016 to 3 1/2 per cent in 2017-18, a weaker outlook than the Bank had projected in its January Monetary Policy Report (MPR). After a slow start to 2016, the US economy is expected to regain momentum, but with a lower profile and a composition that is less favourable for Canadian exports. Financial conditions have improved, partly in response to expectations of more accommodative monetary policy in some major economies.
Prices of oil and other commodities are off their earlier lows and slightly above levels assumed by the Bank in January, but remain well below historical averages. Nonetheless, the Bank expects deeper cuts to investment in Canada's energy sector than were forecast in January. Meanwhile, the Canadian dollar has firmed, reflecting shifting expectations for monetary policy in Canada and the United States, as well as recent increases in commodity prices.
The Canadian economy's complex structural adjustment to the oil price shock is ongoing and will dampen growth throughout the Bank's projection horizon. First-quarter GDP growth appears to have been unexpectedly strong, but some of that strength is due to temporary factors and is likely to reverse in the second quarter. Still, it does appear that the positive forces at work in the economy are starting to outweigh those that are negative. Non-resource exports are expected to strengthen, but their profile is weaker than previously projected, in part because of slower foreign demand growth and the higher Canadian dollar. The economy continues to create net new employment, especially in services, despite job losses in resource-intensive regions. In this context, household spending continues to expand moderately. While business investment is still shrinking due to sizeable declines in the energy sector, it is expected to turn positive later this year. The complex adjustment figures importantly in the Bank's annual review of the economy's potential, which has resulted in a lower estimated range for potential output growth.
The combined effect of all of these global and domestic developments would have been a modest downgrade of the Bank's outlook. However, the fiscal measures announced in the March federal budget will have a notable positive impact on GDP. The Bank now projects real GDP growth of 1.7 per cent in 2016, 2.3 per cent in 2017 and 2.0 per cent in 2018. This new growth profile, combined with the revised estimate for potential, suggests the output gap could close somewhat earlier than the Bank had anticipated in January, likely in the second half of 2017.
Inflation in Canada continues to track largely as the Bank anticipated. Total CPI inflation is below the 2 per cent target and will likely ease further before returning to 2 per cent as the effects of exchange rate pass-through and lower consumer energy prices unwind and the economy's excess capacity diminishes. Measures of core inflation are close to 2 per cent and continue to reflect the offsetting influences of past exchange rate depreciation and excess capacity.
Overall, the risks to the profile for inflation are roughly balanced. Meanwhile, financial vulnerabilities continue to edge higher, in part due to regional shifts in activity associated with the structural adjustment underway in Canada's economy. The Bank's Governing Council judges that the overall balance of risks remains within the zone for which the current stance of monetary policy is appropriate, and the target for the overnight rate remains at 1/2 per cent.
USD/CAD: Loonie Takes Small Step Back From 9-Month High, Trades at C$1.28 Level The USD/CAD pair edged up 0.08% to trade at C$1.2826, near the loonie's recent nine-month high at the C$1.2752 level.
Oil prices continued to offer some support to the commodity-based loonie, as WTI futures rose 0.41% to $41.93 per barrel, while Brent contracts climbed 0.38% to $44.35 per barrel. Gains were made ahead of the OPEC meeting scheduled to take place over the weekend, with traders waiting to see whether producers will reach an output freeze deal.
The biggest data release of the session was inflation figures out of the US. According to the latest figures from the Bureau of Labor Statistics, the CPI ticked higher to 0.1% from -0.2% month-on-month, while the yearly print eased to 0.9% from 1.0%. The core gauge decelerated slightly to 0.1% in March and eased to 2.2% year-on-year. All four measures missed market expectations, disappointing traders.
The unimpressive numbers signal that the Federal Reserve (Fed) could put another pause on policy tightening during the April meeting.
"This breather means the Fed can continue to hold off raising interest rates at its April meeting, awaiting further confirmation that the US economy has gathered speed after its first quarter lull," said Leslie Preston, senior economist at TD Economics.
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USD/CAD: Loonie Rises 1 Figure, Trims Daily Losses The Canadian dollar has been trimming its losses during the London session on Monday, as the USD/CAD pair dropped around 100 pips from daily highs and was spotted trading near C$1.29.
Oil was also trading 'only' 2.8% lower on the day around $39.00, having printed lows below $38.00 earlier in the Asian session, down some 7%.
Over the weekend, major OPEC and non OPEC producers met to discuss a production freeze agreement in Doha, Qatar. The Kingdom of Saudi Arabia publicly declared its unwillingness to join the agreement without Iran's participation.
However, Iran refused to join any output freeze or cut, until their production returns back to pre-sanction levels, as they are now able to export oil once again after sanctions were lifted.
These news sparked strong risk-off sentiment and helped the yen. Stocks were seen lower, although they erased much of the losses as well and higher yielding currencies were sold-off notably also.
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USD/CAD: Loonie Erases Losses as Oil Trims Losses The so-called loonie erased losses to trade at C$1.2803, after rising to a one-week high of C$1.2986 earlier in the session.
Oil prices managed to trim their previous declines triggered by a lack of agreement at the Doha OPEC meeting to cap crude output levels. At the recent meeting Saudi Arabia said it would freeze its production only if other countries would participate in the deal, which was impossible without Iran's presence there.
During the afternoon session futures for WTI were down 1.54% and traded at $39.74 per barrel, while Brent futures were seen 0.6% lower at $42.84 per barrel, after slumping over 5% earlier in the session.
"The failure to agree on a reduction in crude oil output at the weekend meeting of OPEC producers and Russia should come as no surprise. But volatility in crude prices in reaction to the news is unhelpful for risk sentiment," Scotiabank said in a note.
The focus this week will be on Bank of Canada (BoC) Governor Stephen Poloz and Deputy Governor Carolyn Wilkins' testimony in front of the parliamentary finance and banking committees on Tuesday and Wednesday, respectively. "Expect the main thrust of the governor’s comments to reflect the recent MPR and policy decision comments," Scotiabank added.
Last week the BoC announced it would keep the key interest rate at 0.5%, adopting a more neutral position, but keeping a dovish tone.
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USD/CAD: Loonie Trims Gains on Lower Oil, US Data
The USD/CAD pair rose 0.56% and traded at C$1.2727 after reaching an intraday high of C$1.2734. During the previous session the pair hit C$1.2597 - the lowest level since July.
A stronger US dollar on Thursday encouraged oil traders to pocket profits after crude reached the highest level since November. The move weighed on the loonie.
Futures for WTI, the US benchmark, fell 1.40% to trade at $43.56 per barrel, down from a high of $44.50 seen overnight for the first time since November. Brent contracts, the international standard, dropped 2.10% for the session to $44.84 per barrel, after breaking the $46 per barrel mark.
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February 2016 Canadian retail sales 0.4% vs -0.8% exp m/m Details from the February 2016 Canadian retail sales data report 22 April 2016
USD/CAD forecast for the week of April 25, 2016 The USD/CAD pair broke down during the course of the week, slicing below the bottom of the hammer from the previous week. With that being the case, the market looks as if we could see continued bearish pressure, but there is quite a bit of support just below. With this being the case, it’s probably best to trade this market off of short-term charts, and not try to hang onto any type of longer-term move as there should be plenty of volatility in this general vicinity. With this, we will look for short-term trading opportunities.
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USD/CAD: Loonie Near 10-Month High on Higher Oil The USD/CAD pair was down 0.39% and trading at C$1.2628 after hitting an intraday low of C$1.2612.
The pair was largely driven by higher crude prices, helping out the resource-linked loonie. Futures for West Texas Intermediate crude oil, the US benchmark, gained 3.24% on Tuesday, trading at $44.02 per barrel. The international benchmark, Brent, rose 2.88% to $45.76 per barrel.
"Risk-on sentiment in equities, BP Q1 earnings ahead of expectations and a weaker dollar all contributed to higher oil markets on Tuesday," said Jasper Lawler, an analyst at CMC Markets.
Traders also absorbed Bank of Canada Governor Stephen Poloz’s speech on Tuesday. Poloz offered an interesting perspective on slower global trade at the Canada-US Securities Summit in New York.
He stressed that weaker trade does not inevitably mean a recession, adding that a slower pace will recover with new global integration opportunities and additional company creation.
"The most important structural factor behind the slowdown in trade growth is that the big opportunities for increased international integration have been largely exploited," Poloz said.
The speech gave no additional hints in terms of future monetary policy stance, but did highlight lower productivity growth.
"Poloz pointed to the fact that slower productivity growth has implications for an economy's potential growth rate, which in most advanced economies is now lower than it was prior to the recession. This in turn has knock-on effects for the neutral rate for monetary policy – that is the rate at which monetary policy is no longer acting to stimulate or curb inflation
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USD/CAD: Loonie Tumbles After Hitting Fresh 10-Month High
The USD/CAD pair surged 1.25% to C$1.2685 on Tuesday, after touching an intraday low of C$1.2468.
The main driver for the pair was lower crude prices, which extended the losses booked in the previous session. Futures for WTI fell 2.86% to trade at $43.50 per barrel, while Brent futures declined 2.16% to $44.84 per barrel.
Traders are carefully monitoring the official US government data from the Energy Information Administration, which are scheduled to be released on Wednesday.
"The broader tone appears dominant, and risk aversion presents downside risk to CAD as we enter the NA session with added pressure from continued weakness in oil prices (WTI falling toward $44/bbl)," said Eric Theoret, currency strategist at Scotiabank.
Meanwhile, all eyes are on the Bank of Canada (BoC) Governor Stephen Poloz, who is participating in a panel discussion at the Milken Institute in Los Angeles at 12:30 p.m. EDT (1630 GMT). The topic is "Monetary Policy: Out of Ammunition?"
When Poloz spoke about the impact of monetary policy in the past, he stressed that the idea that monetary policy is not working in the current conditions is simply not true.
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