<img src="https://certify.alexametrics.com/atrk.gif?account=HSBGm1akGFL1WR" style="display:none" height="1" width="1" alt="">

Canadian dollar update – Thursday June 18, 2020. Firm oil prices undermine USD/CAD.

Canadian dollar update – Thursday June 18, 2020. Firm oil prices undermine USD/CAD.
Arif Harji
by Arif Harji on June 18, 2020


FX & market recap:

The commodity currency bloc was a tad whippy overnight, led by AUD/USD. Australia reported a loss of 227,700 jobs in May and that the unemployment rate rose to 7.1%. FX traders remained cautious ahead of monetary policy announcements from the Swiss National Bank and the Bank of England. The SNB left rates unchanged and reiterated its commitment to low rates.

US jobless claims will be the focus for traders with the Trump/John Bolton book feud providing the entertainment.

Canadian dollar highlights:

USD/CAD got side-swiped by the AUD/USD reaction to the employment report. Prices spiked to 1.3607 from 1.3564 then quickly reversed, to trade at 1.3524 just as NY opened. Yesterday, Canada May CPI data was far weaker than expected, falling 0.4%y/y, but the news was ignored. Concerns about another COVID-19 outbreak in the US are supporting prices while steady-to-rising crude prices, limit gains.

Euro highlights:

EUR/USD continues to consolidate above support at 1.1200-30. The single currency continued to be weighed down by Wednesday’s weak inflation data, while new COVID-19 cases in the US limited losses.

British pound highlights:

GBP/USD dropped to 1.2474 immediately after the Bank of England announced a £100 million increase in quantitative easing. Prices quickly rebounded to 1.2550, as the news was expected. BoE Chief Economist Andy Haldane voted against the increase. It left its benchmark interest rate unchanged at 0.1%.

Asia Pacific highlights:

USD/JPY dropped on the back of mild risk-aversion selling due to the US COVID-19 cases and softer US Treasury yields.