USD/CAD rallied to its highest levels since June of 2019 in early trading on Friday. The Canadian dollar was pressured as crude oil prices fell to their lowest levels in over a year. The Canadian dollar has a positive correlation with crude oil, since it is one of the world’s leading oil producing nations.
The selloff in crude oil was spurred by fears of a coronavirus pandemic that could hinder global economic growth and in turn reduce demand. China and the United States are the world’s largest oil consumers. Earlier in February, the International Energy Agency said that it expects global oil demand will fall in the first quarter of 2020 - which would mark its first quarterly contraction in over 10 years.
On Wednesday, the number of new coronavirus infections in China was exceeded by new cases abroad, underscoring the danger of the outbreak becoming a pandemic. Over 83,000 people in at least 53 countries have been infected, and more than 2,800 have lost their lives. The vast majority of cases have been in China so far.
On Thursday, Tedros Adhanom Ghebreyesus, the director general of the World Health Organization (WHO) said: “This virus has pandemic potential”. He also warned; “we are actually in a very delicate situation in which the outbreak can go in any direction based on how we handle it.”
European markets sank in early trading on Friday, following Thursday’s bloodbath in US stocks, with the Dow closing 1,190 points lower. US stock index futures currently point to a lower open. Meanwhile the safe haven Japanese yen and Swiss franc are trading sharply higher.
Looking at the USD/CAD monthly chart we can see that a pennant pattern has formed and that price is currently pressed against the upper trendline. A break above will bring the prior high of 1.3664 into view for the bulls.
Trading Futures, Options on Futures, and Foreign Exchange involves substantial risk of loss and may not be suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.
Recommended Content
Editors’ Picks
GBP/USD hovers around 1.2750 on UK election day
GBP/USD is trading sideways near 1.2750 in the European session on Thursday. A broadly softer US Dollar keeps the pair afloat but traders refrain from placing fresh bets on the Pound Sterling, as UK voters head to polls.
EUR/USD retakes 1.0800 ahead of ECB Accounts
EUR/USD is battling 1.0800, regaining upside momentum in the European session on Thursday. The pair's renewed uptick is attributed to fresh US Dollar selling on escalated speculations of a September Fed rate cut. ECB Accounts is next in focus.
Gold trades with caution above $2,350, as focus shifts to US NFP
Gold price has reversed early gains to trade cautiously above $2,350 on Thursday. Sustained US Dollar weakness alongside sluggish US Treasury bond yields keeps the downside in Gold price capped amid the July 4 US holiday-thinned market conditions. Friday's NFP data eyed.
MANTRA partners with UAE real estate giant MAG to tokenize $500 million in assets
MANTRA announced its partnership with UAE real estate giant MAG on Wednesday via social media platform X. This collaboration introduces new investment opportunities for tokenized real estate worth $500 million in the flourishing Middle Eastern market.
Investors await NFP to validate their Fed rate cut bets
Investors expect two rate cuts, even though Fed signals one. Recent data corroborates investors’ take. Nonfarm Payrolls waited for more confirmation.