The Canadian dollar closed out Friday as a big net loser thanks to negative risk sentiment pushing higher-yielding currencies and oil prices lower for the week’s session.
Overlay of CAD Pairs: 1-Hour Forex Chart
Canadian Headlines and Economic data
Oil prices rise during the Asia session on OPEC+ cuts, record China imports, but later reverses to the downside as Gulf ends voluntary curbs.
A broad move lower in the Loonie during the London session, possibly off of weaker-than-expected European trade data (e.g., German Exports in April 2020: -31.1% on April 2019) or geopolitical tensions (North Korea cuts communications with South Korea, Pompeo demands Iran release US detainees, urges Libya ceasefire)? But during the U.S. session the Loonie turned higher a bit, possibly on rising risk-on sentiment after the WHO’s makes a U-turn on asymptomatic transmission.
No catalysts from Canada on the session, but the Canadian dollar shifted lower during Asia and London trade before picking up speed after a dovish outlook on the economy from the Federal Reserve. This event sparked a broad shift negative in global risk sentiment, taking down oil prices as well.
Loonie weakness continued into the Thursday session off of the FOMC event and falling oil prices. Negative global risk sentiment accelerated during the U.S. session, likely on fears of a second wave (Florida Reports Highest Daily Increase in Coronavirus Cases Since Outbreak Began) are added on top of the Fed’s dismal outlook to worry about.
Positive global risk sentiment recovers during the Asia and London trading sessions (possibly profit-taking?) to lift the Loonie a bit, but swings back to negative later to secure the Loonie’s net loss for the week as fears continue to rise of a second wave and a re-implementation of lockdown protocols (CDC warns U.S. may reimplement strict coronavirus measures if cases go up ‘dramatically’).