USD/CAD - Canadian Dollar Can't Get Past 75 Cents

Learn how KnightsbridgeFX can help you save up to 2% when buying or selling US dollars compared to your Canadian bank’s rates – click here to compare bank rates

Canadian dollar bulls attempted to charge through the 75-cent level (USD/CAD $1.3333) but were not successful USD/CAD touched $1.3333 then bounced like a fat man bungee jumping. Prices rebounded to $1.3400 in early Toronto trading, alongside similar price action in the antipodean currencies.

Traders were cautious, and markets were defensive overnight. The major Asia equity indexes closed with minor losses, and European equities flipped into negative territory, alongside a similar move in U.S. equity futures. Stocks have enjoyed a profitable month, so month-end profit-taking is understandable.

However, it was the morning’s dip in stock prices that fueled U.S. dollar demand, undermining the Canadian dollar in the process.

Gold has been getting a lot of attention. It rose over 34% since March and came within $20.00 of the psychologically important $2,000.00/ounce level overnight.

XAUUSD peaked at $1,981.20 then dropped to $1,907.21 before recovering to $1,929.23 in Toronto, today.

EUR/USD peaked at $1.1780 yesterday and has retreated to $1.1712 today. Profit-taking ahead of Wednesday’s Federal Open Market Committee meeting is one factor weighing on prices.

However, the longer-term technicals are bullish, with plenty of buyers waiting for a dip, to buy the single currency, which may limit losses.

GBP/USD had a roller-coaster of a night, rising and falling between $1.2840 and $1.2903. Prices are trading in Toronto at $1.2873, supported by EUR/GBP selling while ignoring concerns around U.K./E.U. trade talks.

USD/JPY took out support at 106.10 and then 105.50, turning sentiment bearish and targeting further losses to 103.30 Prices are undermined by weak U.S. Treasury yields and safe-haven demand for yen due to geopolitical tensions. China continues to snipe at critics of its virtual annexation of Hong Kong.

Traders are keeping an eye on reports about progress towards a coronavirus vaccine. That news is alleviating some of the negative growth concerns stemming from the resurgence of COVID-19 cases in the U.S.

The U.S. data calendar lacks top tier reports. Consumer Confidence and the S&P Case-Shiller Home Priced index are due, but neither report will have any impact on FX markets.


Rahim Madhavji is the President of KnightsbridgeFX.com, a Canadian currency exchange that provides better rates than the banks to Canadians
Learn how KnightsbridgeFX can help you save up to 2% when buying or selling US dollars compared to your Canadian bank’s rates – click here to compare bank rates