us-dollar-bank-notes-jar - USD

The US dollar is higher against the Canadian dollar on Tuesday morning. Investors sought havens in the Forex market including the dollar and yen while elsewhere buying gold and selling shares as concerns grew over a coronavirus outbreak in China. The equity sell-off was greatest on the Hang Seng index after Moody’s downgraded the credit rating of Hong Kong because of the ongoing protests.

USD/CAD was higher by 26 pips (+0.2%) to 1.3073 with a daily range of 1.304 to 1.308 as of 9.30am GMT with the currency pair remaining at the top of its 5-day price range but still below near-term resistance at 1.31.

The Loonie

The dollar saw haven flows bid the currency up against the Canadian dollar after it was reported four people have died from a virus in China that can spread person-to-person. As the word-reserve currency, the dollar tends to perform well in periods of uncertainty as American investors exchange foreign investments back into dollars.

The US dollar

The outbreak started in the Chinese city of Wuhan and travellers can now expect extra screening before flights from the city as a precaution against the spread of the disease outside of China. Cases of the disease have already been reported in other Asian counties in including Thailand. Authorities believe and the virus is contained and if that is the case, haven flows could quickly reverse. However if the coronavirus becomes another situation as bad as SARS, the demand for havens like the dollar could increase.

US investors are returning on Tuesday after a long holiday weekend celebrating Martin Luther King Jr holiday. The US dollar – Canadian dollar exchange rate was relatively unmoved on Monday despite some wild swings in the oil price that can correlate with the Canadian dollar.

The focus will shift later to the first day of the Davos conference in Switzerland, where President Trump will give a speech that normally caries a lot of interest, particularly for attendees and TV viewers interested in the next direction the US might take on trade. Presumably the speech will focus on the successful signing of the US-China phase one trade deal and the resilience of the US economy under Trump’s watch.


Currencylive.com is a news site only and not a currency trading platform.
Currencylive.com 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 currencylive.com do not represent our views.