The Canadian dollar today spiked higher against the US dollar after the Federal Reserve announced massive quantitative easing measures causing the greenback to fall. The USD/CAD currency pair fell briefly before recouping its losses and heading higher as the dollar recovered and the Loonie was weighed down by weak crude oil prices.
The USD/CAD currency pair today fell to a low of 1.4335 in the early American session before reversing course and rallying to a high of 1.4561 and was near these highs at the time of writing.
The currency pair traded in a tight range earlier today as crude oil prices remained depressed amid the Saudi-Russia oil price war, which could bankrupt US Shale producers. The ill-advised oil price war has led the price of a barrel of West Texas Intermediate (Canadian/US crude oil) to fall to a low of $20 on Friday; the index was trading between $21-$23 today. The pair hit its daily lows despite the release of upbeat Canadian wholesale sales data for January by Statistics Canada. Wholesale sales grew 1.8% in January beating analysts estimates pegged at -0.2%. These figures will likely change as the impact of the coronavirus is felt across most countries globally.
The lack of releases from the US docket saw the pair spiked lower after the massive stimulus measures announced by Jerome Powell, the Fed Chairman. The proposals include offering loans to businesses and unlimited buying of investment-grade corporate bonds.
The currency pair’s future performance is likely to be affected by geopolitical events and crude oil prices.
The USD/CAD currency pair was trading at 1.4519 as at 18:18 GMT having risen from a low of 1.1335. The CAD/JPY currency pair was trading at 76.70, having rallied from a low of 75.98.
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