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Euro continues its downturn


12.05.2022
Euro continues its downturn

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

US Dollar             1.2975-1.3075

Euro                     1.3550-1.3650

Sterling                1.5850-1.5950

 

WTI Oil (opening level) $104.60 (Oil price is up $1.40 from yesterday's opening level)

The US Dollar Index is stronger this morning and again hitting a 20-year high. Yesterday saw the Dollar jump on the US April inflation report that showed prices rising by 8.3% which was slightly higher than the predicted 8.1% that economists were looking for. The good news is that it looks like inflation has started to moderate as the inflation rate dropped from the March number of 8.5%.

The Dollar picked up its biggest gains against the Euro as EUR.USD fell to trade at 1.0420 this morning and it still looks to drop further in early North American trading. Further aggressive US Interest rate hikes, war in Ukraine and higher energy prices are all increasing the odds of a recession in Europe which are weighing on the value of the Euro. Showing how weak the Euro really is EURO.CAD dropped to trade at 1.3575 this morning and it too looks set to go lower.

The Loonie had a mixed session, it lost ground to the strong US Dollar but as mentioned picked up some gains against the other currencies. USD.CAD opens the day above the 1.3000 (0.7692) level and it looks set to stay above that level throughout the day.

Stocks were all lower overnight and North America after a tough day yesterday is set to drop again this morning but it might be a little more orderly than previous sessions. We do get some further US inflation data in the form of Producer Price index but for the most part if the stock market continues to fall the US Dollar should remain supported.

 



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