CAD Falls as Crude Oil Prices Crash
The Canadian dollar drops in the FX market as crude oil prices downtrends along with the Dow Jones and S&P 500. A blowout U.S. jobs report reflected a period where the country added the most positions since May 2018.
The Dow Jones and S&P 500 closed -0.98% and -1.71% to the downside on Friday.
U.S. President Donald Trump said he doesn’t know if the stimulus is needed with regard to fiscal matters. He pressured the Federal Reserve to act instead. Trump signed a $7.8b package to help funding.
According to White House Economic Adviser Larry Kudlow, he leans against payroll tax cuts. They may go back to Congress for more stimulus, he added. The White House is still working on various ideas and stimulus plans are still at the brainstorming stage.
The COVID-19 updates and oil-price dynamics will continue to have a significant impact on markets on the fx boards.
Other Currency Movement
CAD sank on its worst while Japanese yen gains. Treasuries have gone down as investors piled into the safety of government bonds. The yen outperformed while financial markets plunged with the worst one-day crash in crude prices.
Panic began following headlines from the key oil producers. OPEC and Russia failed to reach a deal prolonging their output cap scheme, aggravating the economic uncertainty already persisting.
This fuels the panic caused by the escalation of the virus outbreak. The 10-year Treasury fell below 0.5% and trading was halted as US equity futures crashed. Stocks in Asia are also in red.
In forex trading, China, Australia’s largest trading partner has posted their largest trade deficit in 16 years, at 4% decline in imports while exports down to 17.2 percent.
The dollar dived to the mid-Y101 level, its lowest since November 2016. The euro was at $1.1397-1398 and Y116.89-91 against $1.1275-1285. Moreover, 118.91- Y119.01 in New York and $1.1234-1235 and Y118.85-89 in Tokyo on Friday.
The Swiss franc and euro outpaced gains in the British pound, AUD and NZD declined.
Given the Canadian economy heavily relies on oil exports, declining WTI will have an inverse impact on the USD/CAD pair. Moreover, black gold recently dropped to the four-year low around $30.60 amid expectations of this widening demand-supply gap.
Forex news sees flash crash on Black Monday amid both the coronavirus and oil’s 30+% slump.
With that, the frequently oil-linked Canadian dollar proved weakest in the pack at this time.
