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Middle East tensions support the American dollar and oil price


18.01.2024
Middle East tensions support the American dollar and oil price

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

US Dollar        1.3450-1.3550

Euro                1.4650-1.4750

Sterling           1.7100-1.7200

WTI Oil (opening level) $72.65

The US Dollar Index is holding its own at the moment as it reacts to a strong US economy and worrying developments in the Middle East. The Dollar remains strong as the US Retail Sales report yesterday came in much better than expected, such positive news will further allow the Fed to hold off on rate cuts until inflation is fully under control. In the Middle East, with the Red Sea now effectively closed to shipping the US and UK continue to attack the Houthis and Iran and Pakistan exchanged missile fire yesterday, the US Dollar and the oil price will remain supported as long as markets are concerned about expanding global conflicts.

The Canadian Dollar for the most part is unchanged this morning as USD.CAD opens the day near the 1.3500 (0.7407) level so it did pick up a tiny bit of strength overnight but nothing significant. If the oil price has a significant jump in the coming days we may see the Loonie able to blunt some of the strength of the US Dollar but I would not hold out for a lot of strength from our Dollar

Stocks are set to continue their decline on the opening so look for the US Dollar to remain supported and the Canadian Dollar to give back some strength throughout the day.

 



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