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Canadian dollar update – Friday March 27, 2020. Riding the see-saw markets.

Canadian dollar update – Friday March 27, 2020. Riding the see-saw markets.
Albert Edwards
by Albert Edwards on March 27, 2020

CURRENCY MARKET UPDATE

U.S. dollar highlights:

Fifty-two years ago, the Moody Blues offered rises on their see-saw. Equity and FX traders took them up on their offer, overnight as prices in both asset classes went up and down. Thursday’s massive US weekly jobless claims (actual 3,283,000) underscoring Fed Chair Powell’s comment that the US economy may already be in recession. The US dollar could rally and equity markets fall, on the back of profit-taking ahead of the weekend.

Canadian dollar highlights:

USD/CAD continues to track broad US dollar moves and oil prices. WTI oil rose from $20.82/barrel at the beginning of the week to $23.61/b today, which helped drive USD/CAD from 1.4560 to 1.4066 today. Canada like most of the world is facing a severe recession, which will be exacerbated by the decimation of the oil industry.

Euro highlights:

EUR/USD traded higher in Asia, EUR/USD rose from 1.1033 at the US close to 1.1086 in Asia before sliding to 1.1009 in NY, in part due to profit-taking after this week’s rally.  Nevertheless, EUR/USD is still up 2.98% from Monday’s open. Traders are also concerned about the weak EU response to the Coronavirus crisis. EU policymakers say they need two more weeks to formulate a response.

British pound highlights:

GBP/USD posted a 5.32% gains since Monday’s NY start. Prices climbed to 1.2305 from 1.2135 just before NY opened. UK PM is taking the coronavirus crisis seriously. He tested positive for COVID-19.

Asia Pacific highlights:

USD/JPY tracked Nikkei 225 moves, which closed with a 3.88% gain and the roller-coaster moves in US 10-year Treasury yields. They rose from 0.778% to 0.853% then dropped to 0.772% in early NY trading USD/JPY bounced in a 108.24-109.68 range, with the massive US jobless claims numbers weighing on prices, as well.