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Canadian dollar update – Monday June 22, 2020. Greenback in the red again - gives back Friday's gains.

Canadian dollar update – Monday June 22, 2020. Greenback in the red again - gives back Friday's gains.
Arif Harji
by Arif Harji on June 22, 2020

CURRENCY MARKET UPDATE

FX & market recap:

Friday’s US dollar rally is just a memory as the gains have been reversed. The greenback opened in New York today, nearly unchanged from Friday’s opening level. NZD is a tad firmer, while GBP is modestly lower. The others are close to flat. Global equity markets didn’t provide much direction. Asia’s main indices closed on a mixed to unchanged note. European bourses are modestly lower while US S&P futures are a tad higher.

Canadian dollar highlights:

USD/CAD dropped alongside the improved risk sentiment tone, supported by steady to higher crude oil prices. Bank of Canada Governor Tiff Macklem is speaking today. His topic is “Monetary Policy in the Context of COVID.”

Euro highlights:

EUR/USD climbed steadily from the opening bell in Asia. The single currency rose from 1.1170 to 1.1226, in part because traders are buying into hopes for a global economic recovery, rather than fears of a second-wave coronavirus outbreak. Those hopes may be misplaced, at least from an American perspective. The Washington Post reported that 29 states and US territories saw an increase in their seven-day average of new COVID-19 cases.

British pound highlights:

GBP/USD surged to 1.2432 from 1.2337 in Europe, before slipping to 1.2380 in NY. The currency pair tracked EUR/USD higher, while getting an added boost from comments by Bank of England Governor Andrew Bailey. Mr. Bailey suggested that the BoE would not raise interest rates until quantitative easing was reversed, which is totally opposite to the previous BoE policy. Traders concluded that if so, the risk of negative interest rates was negligible.

Asia Pacific highlights:

USD/JPY traded quietly in a tight 106.77-107.00 range. Lower US Treasury yields, and lingering second-wave COVID-19 fears weighed on prices.