USD/CAD Extends Bearish Channel, Falls to 2-Month Low

USD/CAD is declining on Friday, touching the lowest level since October 29. The pair is following the bearish channel that started this month in an exemplary manner. On Christmas Day, the price tried to break above the channel’s resistance at 1.1368 but failed to do so.

Currently, one US dollar buys 1.3079 Canadian dollars, down 0.32% as of 3:40 PM UTC. Yesterday, the price closed 0.40% lower.

The main driver behind the Loonie’s rally is increasing oil prices.

Earlier today, the Energy Information Administration (EIA) said that US crude inventories declined by almost 5.5 million barrels last week ended December 20, while analysts expected a drop of only 1.7 million barrels. The report, which is usually published on Wednesday, was delayed until Friday due to the Christmas holiday.

The EIA report also stated that gasoline inventories increased by 1.96 million barrels, slightly more than the expected rise of 1.66 million barrels. Distillate inventories declined 152,000 barrels, against analysts’ forecasts of an increase by 800,000 barrels.

Given the declining supply, oil price bounced back after an intra-day drop. Both Brent and WTI brands are trading close to 3-month highs again. Oil prices are only a stone’s throw away from updating the highest level in eight months.

As a rule, surging crude boosts the Loonie since Canada is an oil-dependent economy.

Yesterday, Russian Energy Ministry said that a decline in oil supply would push prices up after the New Year. The ministry’s findings were published in a draft energy strategy document cited by Russian media. The report reads:

Accelerated development of the most effective reserves and decreasing investment into geological exploration and into oil and gas projects in different regions will create prerequisites for the decreasing supply of oil after 2020, which will require intensive investment into shale and other costly projects and may lead to the start of the new phase of price growth.”

However, the document says that the price might eventually reduce on weakening oil demand.

Besides a stronger Canadian dollar, the USD is itself losing ground against majors, as year-end flows put pressure on the American currency. is a news site only and not a currency trading platform. is a site operated by TransferWise Inc. (“We”, “Us”), a Delaware Corporation. We do not guarantee that the website will operate in an uninterrupted or error-free manner or is free of viruses or other harmful components. The content on our site is provided for general information only and is not intended as an exhaustive treatment of its subject. We expressly disclaim any contractual or fiduciary relationship with you on the basis of the content of our site, any you may not rely thereon for any purpose. You should consult with qualified professionals or specialists before taking, or refraining from, any action on the basis of the content on our site. Although we make reasonable efforts to update the information on our site, we make no representations, warranties or guarantees, whether express or implied, that the content on our site is accurate, complete or up to date, and DISCLAIM ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Some of the content posted on this site has been commissioned by Us, but is the work of independent contractors. These contractors are not employees, workers, agents or partners of TransferWise and they do not hold themselves out as one. The information and content posted by these independent contractors have not been verified or approved by Us. The views expressed by these independent contractors on do not represent our views.