USD/CAD - Canadian Dollar Is Not Getting Any Respect
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USD/CAD - Canadian Dollar Is Not Getting Any Respect
Learn how KnightsbridgeFX can help you save up to 2% when buying or selling US dollars compared to your Canadian bank's rates – click here to compare bank rates
- Russian bombing of Ukraine nuclear power plant sparks risk aversion
- Nonfarm payrolls data may be overshadowed by geopolitics
- Canadian dollar underperforms against commodity currency bloc
USDCAD Snapshot: open 1.2729-33, overnight range-1.2672-1.2755, close 1.2681, WTI open $110.33, Gold open $1947.44
The Canadian dollar is the worst performing major G-10 currency since yesterday's NY open and the only commodity currency to lose value against the US dollar.
The Canadian dollar is sharply weaker despite steady to high oil prices and a hawkish speech by Bank of Canada Governor Tiff Macklem.
West Texas Intermediate (WTI ) bounced around in a $107.30-$112.77/barrel range overnight which keeps prices at levels last seen in 2011. The Canadian dollar appears to have ignored the development as USDCAD soared to 1.2756 today from 1.2589 yesterday.
Oil traders fear supply shortages as many major western oil companies including Exxon, Shell and British Petroleum exit their Russian operations. Opec is unwilling to increase production due to greed and a show of support for Russia.
US nonfarm payrolls are expected to show a gain of 400,000 compared to 467,00 in January and the unemployment rate to dip to 3.9% from 4.0%. Average hourly wages are expected to rise 0.5% m/m, and if the result is sharply higher, it will renew the wage inflation debate. Nevertheless, the data will take a backseat to the Russia/Ukraine war.
Global risk sentiment took a nasty turn for the worse overnight after Russia bombed a Ukrainian nuclear power plant. Putin thought he had a“green light” for his actions after China vetoed an International Atomic Energy Agency resolution aimed at protecting Ukraine nuclear facilities.
Traders reacted to the word“nuclear” envisioning another Chernobyl or even worse, Hiroshima. The US dollar rallied in the scramble for safe-haven currencies. The Australian and New Zealand dollars benefitted from safe-haven demand as both countries are resource based and they are far away from the conflict area.
EURUSD tanked. The single currency plunged from 1.1067 to 109.74 due to the Russia/Ukraine war. Putin bombed the nuclear plant after China sided with Putin and voted against an International Atomic Energy Agency resolution to guarantee the safety of Ukraine nuclear facilities. Weaker than expected Eurozone January Retail sales (actual 0.2% m/m vs forecast 1.3%) data was ignored.
GBPUSD slumped along with EURUSD falling from 1.3353 to 1.3282 due to safe-haven demand for US dollars. UK Construction PMI beat estimates but was ignored.
Canada Ivey PMI is on tap.
Learn how KnightsbridgeFX can help you save up to 2% when buying or selling US dollars compared to your Canadian bank's rates – click here to compare bank rates
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