2019-11-11 • Updated
USD/CAD slumped to 1.3545 in the past week due to rising oil prices and weaker USD. WTI and Brent oil futures rose after the Saudi Arabia and Russia have committed to extend production cut agreement. The political turmoil in Washington that could potentially end with Trump’s impeachment weighted in the USD depreciation against its major peers.
Next week the main focus will be on the Bank of Canada’s rate statement which is due on Wednesday. The central bank is widely expected to remain its rate on hold despite the soaring prices at Canadian house market. Household debt is poised to reach record levels as continuously low rate whet appetite for credit and inflated a bubble in real estate market. Canadian CPI figures picked up in April, but not enough for the central bank to raise its interest rate. An extremely dovish tone of the BoC’s policymakers will definitely hurt the CAD. The loonie might recoup its losses on May 25 following the OPEC meeting where more details on the extension of production cut agreement will be announced. On the USD front, pay special attention to what FOMC members’ chorus will tell you. A number of Fed’s policymakers will be speaking in the first half of the week. On Friday, traders will be waiting for the preliminary release of GDP figures and a monthly update of core durable goods orders. If headlines beat market expectation, USD might gain a strong momentum.
Technically, USD/CAD may slide further towards the solid support at 1.3480, or lower towards 1.2242 (100-day MA intersecting lower border of the rising trading channel). On the upside, there is a strong resistance at 1.3795 that might prevent USD from rising higher.
China has issued new oil product export quotas to allow oil companies to send surplus barrels overseas, particularly Sinopec, which has the highest volume among quota holders. While the exact quota volume remains undisclosed, oil companies are forecasted to export approximately 3.5 million metric tons of clean oil products in September, a 10% increase from August.
Thanks to the incredible advancements in horizontal drilling and fracking technology, the United States has experienced a mind-blowing shale revolution. They've become the heavyweight champion of crude oil production, leaving Saudi Arabia and Russia in the dust. They even turned the tables and became net exporters of refined petroleum products in 2011.
Oil prices rebounded slightly on Friday but are still expected to show losses for the week due to concerns about slowing growth in the US and China. US crude futures rose 2.7% to $70.41 per barrel, while the Brent contract increased by 2.5% to $74.33 per barrel.
The EUR/USD pair is making gains, approaching multi-month highs around 1.0960, driven by a weakened USD and Christine Lagarde's somewhat hawkish remarks before the European Parliament. Minor housing data from the U.S., specifically New Home Sales for October, came in below expectations but didn't significantly impact the pair. Lagarde, President of the...
Global equities on Wall Street experienced a mixed session following the Thanksgiving holiday, heading for the most significant one-month rally since November 2020. MSCI's global shares index slightly eased but was still on track for an 8.5% monthly gain, fueled by growing investor confidence that U.S. interest rates...
Brent crude futures is maintaining stability this Friday, with traders awaiting an OPEC+ meeting that might lead to further supply cuts. Brent crude was down 8 cents at $81.34 a barrel, following a 0.7% drop in the previous session.
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