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Canadian Dollar continues to benefit from the weaker USD index


18.05.2021
Canadian Dollar continues to benefit from the weaker USD index

Today's expected range for the Canadian Dollar against the major currencies:

US Dollar         1.2100-1.2200

Euro                 1.4650-1.4750

Sterling            1.7050-1.7150

 

The US Dollar Index is weaker this morning as overnight stock markets are once again higher on the back of yesterday's comments from Federal Reserve officials that they will keep interest rates low and keep adding stimulus for some time yet. Both Sterling and the Euro made strong gains against the Greenback overnight, in the UK the unemployment rate fell expectantly to a low of 4.8% and when you tie that in with a strong virus campaign the Pound is doing very well at the moment.

 

Buoyed by the weaker US Dollar and an overnight jump in the oil price the Canadian Dollar had a strong overnight session against the US Dollar with USD.CAD dropping to trade at the 1.2030 (08313) level, the Loonie also made some small gains against the Euro but lost a little to the strength of the British Pound. As long as the sentiment remains for a weaker US Dollar there is no reason to think that the Loonie cannot extend some gains below 1.2000 (0.8333) but remember this move is being pushed by a weaker US Dollar and should that sentiment turn, the Loonie can weaken quickly.

 

Nothing of significance on the calendar for today, Canadian markets will get ready for tomorrow's April inflation report. For today look for USD.CAD to remain near the 1,2000 level.

 



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