USD/CAD: Loonie flat before Canadian trade data

The US dollar is little changed against the Canadian dollar on Wednesday morning as markets await the release of trade data from Canada as well as jobs and service sector data from the United States. Elsewhere futures markets suggest a lower open on Wall Street and in Toronto with fears over the coronavirus remerging.

USD/CAD was lower by 3 pips (-0.03%) to 1.3269 with a daily range of 1.3260 to 1.3300 as of 9.30am GMT. The currency pair rolled over in the early hours of Wednesday, putting in a short-term top around 1.33 before recovering.

USD/CAD – Canadian dollar ended the day flat

The Canadian dollar ended Tuesday basically flat, falling -0.2% against the dollar, tracking the price of oil. Oil prices have been fluctuating wildly as markets try to the price the damage the coronavirus will have on energy demand next to the possibility OPEC will lower production. OPEC, the cartel that sets quotas for many oil producing nations, mostly in the Middle East is deciding whether to hold an emergency meeting in February. On Tuesday technical experts from various nations were discussing the possibility of cutting total oil output by 500,000 barrels per day in order to stabilise prices.

The oil market fell into a bear market on Monday, meaning a 20% decline from its recent peaks. On Tuesday there were signs of a recovery but the price of both Brent crude and WTI crude, the benchmark oil contracts both fell lower into the close.

The uncertainty about whether an emergency meeting will be called by OPEC on February 14 and 15 saw oil speculators turn more cautious. Even if a meeting is agreed in February, it is not guaranteed that member states will want to participate in more production cuts.

The US Dollar

Several economic statistics from the United States showing improvement has seen demand for the dollar pickup this week. It started with the manufacturing sector ending its contraction in PMI data released on Monday. Today sees the release of ADP employment data as well as ISM Services PMI, which will be the next test for the economic recovery in the US.

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