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

Canadian dollar update – Tuesday February 4, 2020. Greenback surges after U.K. PM Johnson’s comments drop GBP.

Canadian dollar update – February 4, 2020. Greenback surges after U.K. PM Johnson’s comments drop GBP.
Albert Edwards
by Albert Edwards on February 04, 2020


U.S. dollar highlights:

USD higher after the Manufacturing Purchase Manager’s Index was 51.9 reading (higher than expected 51.7). New orders also improved to 52.0 reading (versus 48.4 expected) and employment is still below the key level of 50. The manufacturing sector is improving after six months of contraction. USD remains firm mainly due to the coronavirus scare limiting global travel, however, the number of people who have recovered has increased. Meanwhile, the People’s Bank of China plans to add 150 billion CNY in liquidity and markets anticipate a rate cut next. Factory orders for December are expected to improve 1.2% today and markets will focus on Friday’s unemployment rate for January.

Canadian dollar highlights:

CAD remains vulnerable to lower oil prices and defensive to safe-haven demand. Crude oil prices are now below $51.00 per barrel and may continue dropping (due to risk aversion). Meanwhile, January’s manufacturing index increased to 50.6 reading (from 50.4 previously). The economy is stable, and the central bank has kept interest rates on hold; however, there is currently less demand for CAD until market sentiment improves. Deputy Governor Wilkins speaks tomorrow and the unemployment rate for January available on Friday.

Euro highlights:

EUR/USD weaker due to fears the coronavirus will keep spreading (causing USD higher); however, EUR/CAD strength is due to CAD weakness. The World Health Organization said there is no need to interfere with international travel and trade, but markets are still concerned about the outbreak harming global growth. After the Brexit deadline passed last week and the U.K. departed the Eurozone, markets are concerned about the increased risks of a no trade deal. Central bank President Christine Lagarde speaks in Thursday and EUR remains sensitive to market tone and the U.K. trade negotiations.  

British pound highlights:

GBP weaker after Prime Minister Boris Johnson said he would not accept European Union Standards to secure a free trade deal. After officially leaving last Friday, both sides have until the end of this year to secure a trade deal. The chances of a no-deal Brexit are increasing again and weighing on GBP. Meanwhile, the manufacturing index for January increased to 50.0 reading (from 47.5 contraction previously). The Services index reading will be available tomorrow.


Canadian dollar update – Wednesday September 2, 2020. Big figures hold USD losses in check.

Canadian dollar update – Wednesday...

Canadian dollar update – Tuesday September 1, 2020. USD: Nowhere to hide.

Canadian dollar update – Tuesday...

Canadian dollar update – Thursday August 27, 2020. Markets' asleep ahead of Powell Speech.

Canadian dollar update – Thursday...