The USD / CAD continues to track movements in crude oil prices. Sanctions against Iran have prevented crude from the nation to join the international trade were lifted on Saturday and put additional pressure on energy prices. Oil fell 2 percent in the past 24 hours. The price of West Texas has reached the price level of $ 29 and threatened $ 28 but now is trading around $ 28.89.
The Canadian Prime Minister Justin Trudeau promised that the Liberal budget announced in March will address the economic factors deteriorate rapidly. As part of the economic platform for Canadian election the Liberal Party foresaw a need for tax incentives to stimulate growth. The rapid decline of oil has put pressure on the Bank of Canada to avoid a rapid decline which could affect the global economy, even if it can benefit to exporters. The government must intervene and alleviate the burden of the central bank and its commitment to strengthen is a step in the right direction.
The historic decision of the US Federal Reserve to raise rates was announced in December, and since then, global macroeconomic headwinds have rebounded to the point where the rate increases 4 to interest are considered unlikely with forecasts calling for 2 or 3 as it is also a year of US presidential election, which would limit the interventions of the central bank in the key months leading to the election.
USD / CAD eventually trading near the market open, 1.4487, but in fact there was a gap of 0.82 percent between the high and low of the day. The Martin Luther King celebration in the United States has limited the number of participants and the CAD could see further weakness, once the fact of how the fall of the Iranian oil supply can affect oil prices .
The unexpected drop in oil beyond $ 30 dollar put pressure on the Bank of Canada to act on Wednesday. At the end of the year there was a forecast for one or two rate cuts, but not in the first quarter, conditions were still in the comfort zone of the BoC. Bank of Canada (BoC) Governor Stephen Poloz has been proactive in 2015 with a rate cut in January before falling commodity he knew coming. There is a 50/50 chance now that Mr. Poloz will again try to act before the Canadian government and the US increase the second most likely interest rate delay
CAD events to watch this week :.
Wednesday, January 20
8:30 CAD manufacturing sales m / m
8:30 USD Building Permits
8:30 USD CPI m / m
10 : 00 CAD BOC monetary policy Report
10:00 CAD BOC rate Statement
10:30 USD crude oil inventories
11:15 CAD BOC Press Conference
Friday, January 22
8:30 CAD core CPI m / m
* All times EST
for a complete list of events planned for the visit of the foreign exchange market economic calendar MarketPulse
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