The USD advanced compared to 0,353 in CAD last 24 hours.
USD / CAD hit multi-year highs (1.4316) as the price of oil continues to fall as supply far exceeds demand worldwide. The loonie was put at 70 percent in 03. The currency has shown some resilience after the crisis of 08, but was helped by the price of energy company. The slowdown in emerging market demand for crude coupled with production levels increased with the introduction of new technologies and the controversial war pumping drove the price of West Texas below $ 30 earlier today.
The Canadian dollar is a commodity currency with crude oil exports which constitute 13 percent of Canadian exports. The loonie dropped 40 percent since January 2013. The economic irony is that the strong CAD after the crisis eroded the benefits of Canada's manufacturing base, which is now forced to rebuild in an adverse scenario that global growth slows price. The Canadian economy depends on the recovery of its most important trading partner to mitigate the loss of its energy exports, but the US economy shows no signs of quick recovery of the Bank of Canada might be forced to cut rates interest in January.
the US crude oil inventories will be published Energy Administration Information Wednesday, January 13 at 10:30 and given the volatility of energy prices and the strong correlation with CAD investors should be aware of change in crude inventories.
The Bank of Canada released its survey of business prospects yesterday. The sweetness of the resource sector is spreading like commented by Governor Stephen Poloz. The business climate remains pessimistic and could be worse than before the survey was last rout in oil prices.
Canadian Finance Minister Bill Morneau echoed the sentiment regarding the headwinds of growing the economy if prices of commodities remain soft. After winning the elections last year, there was great hope in the new government and Mr. Morneau is still confident the Liberal government plans to increase infrastructure spending and tax cuts will stimulate growth. Canada's budget should be announced in March.
Merrill Lynch BOC should make waves next week with a rate cut. Laurentian Bank called a "coin flip" as the case of a rate cut is growing as fast as the price of oil is falling. The Canadian central bank surprised markets last year with two proactive rate cuts after accurately predicted the oil price fall and its effects on the economy. This time around the central bank faces a different scenario than the main questions now are: What the Fed will do and how long with energy producers to keep pumping levels? In both cases, there is little, the BOC may be same with a proactive stance.
There will be little in the way of indicators to guide the decision of the central bank, only the housing starts and sales price of new houses will be on the agenda this week. The Bank of Canada will announce its rate decision Wednesday, January 20. The problem of being ahead of the Federal Open Market Committee of the Fed (FOMC) is that it means going in blind to the potential market disruption decisions more major central bank in the world. There are also no changes expected to the US benchmark rate, despite the hawkish rhetoric of some members of the Fed. interest rate divergence gave the board the USD for the past two years, with very little to show for it than the Bank of Canada has eased over the Fed tightened, but with the price of oil BOC is running out of room to cut.
oil inventories will be announced Wednesday, January 13 at 10:30 and given the volatility of energy prices and the strong correlation with CAD investors should be aware of changes in crude inventories.
USD / CAD 1.4272 H: L 1.4316: 1.4177
USD / CAD technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 1.3923 | 1.3993 | 1.4104 | 1.4285 | 1.4355 | 1.4466 |
CAD events to watch this week:
Wednesday, January 13
10:30 USD crude oil stocks
Thursday, January 14
7:00 Bank of England rate decision and minutes
Friday, January 15
8 : 30 USD Core retail sales
* All times EST
for a full list of events planned for the visit of the foreign exchange market the economic calendar MarketPulse
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