The Canadian dollar today rallied against its US counterpart as oil prices pressed higher for the third consecutive session boosting the commodity-linked loonie. The USD/CAD currency pair fell from its intra-day highs as the loonie strengthened amid rumours that OPEC and its allies would agree to drastic oil supply cuts to boost oil prices.
The USD/CAD currency pair today fell from a high of 1.4224 in the early European session to a low of 1.4117 in the American session and was near these lows at the time of writing.
The currency pair headed higher at the start of today’s session driven by the stronger greenback before reversing course later in the day. The rally in crude oil prices as tracked by the West Texas Intermediate, which hit a high of 28.54 earlier today was mostly responsible for the pair’s decline. News that OPEC and its allies would hold an emergency meeting on Monday to discuss oil production cuts of up to 10 million barrels per day drove oil prices higher. The launch of a wage subsidy programme by the Canadian government to fight the coronavirus pandemic also boosted the loonie.
The release of the disappointing US non-farm payrolls report, which revealed 701,000 job losses versus the expected 100,000 job losses also contributed to the pair’s decline. The upbeat US ISM non-manufacturing PMI report for March offered the pair some relief.
The currency pair’s future performance is likely to be affected by crude oil prices and geopolitical events.
The USD/CAD currency pair was trading at 1.4128 as at 16:07 GMT having dropped from a high of 1.4224. The CAD/JPY currency pair was trading at 76.77, having rallied from a low of 76.07.
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