The Canadian dollar traded on a firmer note over the long Easter weekend. Prices moved higher, underpinned by a surge in oil prices that took West Texas Intermediate oil (WTI from $64.00 U.S./b to $65.87/b since Thursday). As usual, the United States government played a role in the rally. President Trump’s administration plans to revoke the Iran sanctions waivers issued to some oil importing nations, including China.
Failure to comply would mean hefty penalties against companies (countries) that continue to source Iran crude. The Americans have asked Saudi Arabia and the Organization of the Petroleum Exporting Countries to end their production cap policies to prevent another oil price spike.
So far, it is not working.
The Canadian dollar inched out EUR/USD for the title of best performing G-10 currency since Thursday’s close. Gains were limited due to holidays and a lack of interest ahead of Wednesday’s Bank of Canada monetary policy meeting and quarterly Monetary Policy Report.
The U.S. dollar inched lower in a tranquil, holiday-thinned session. A large swath of global FX markets were closed Friday and Monday for Easter.
AUD/USD slipped ahead of its April 24 domestic inflation report while NZD/USD traded sideways and opened this morning in Toronto unchanged from Thursday’s close.
USD/JPY was sidelined. Fears of a shift to risk aversion trading from the end of Iran sanction waivers combined with a lack of topside gains in U.S. Treasury yields trapped prices in a tight band.
EUR/USD continues to suffer from the soft Manufacturing Purchasing Managers' Index data seen last week. Prices have inched higher since bottoming out in Asia overnight but remained stuck an extremely tight range.
Easter Monday is a partial holiday in Canada. Most financial markets are open, but government offices are closed as are schools. Most of Europe and the U.K. was also shuttered today which usually means the U.S. session will be very quiet.
This morning's American data consists of the Fed Business Activity Index and Existing Home Sales for March. That isn’t enough to spark a trading frenzy.
Rahim Madhavji is the President of KnightsbridgeFX.com, a Canadian currency exchange that provides better rates than the banks to Canadians
