The US dollar is down against the Canadian dollar on Wednesday morning, adding to narrow losses yesterday in the wake of Federal Reserve Chair Jerome Powell’s testimony to Congress. Oil prices rising close to 1% on Wednesday is lending some support to the Loonie.
USD/CAD was lower by 19 pips (-0.14%) to 1.3267 with a daily range of 1.3263 to 1.3296 as of 9.30am GMT. The currency pair is now making further progress to the south of 1.33 and has touched its lowest in a week. Weekly declines now amount to -0.32%.
The CAD higher thanks to boosted oil prices
Easing virus fears have given a boost to oil prices in the last twenty-four hours, which tends to reflect in a higher Loonie due to Canada’s large oil industry. There have been fewer new cases of the coronavirus in China, offering a small light at the end of the tunnel to the crisis.
Bank of Canada Governor Stephen Poloz will join a panel discussion in Melbourne Australia on Thursday, where his comments could give some hint about future interest rate policy. At its meeting two weeks ago, the BOC left the door open to a rate cut this year should the economic slowdown in Canada brought about by the trade war and falling oil prices continue. The Loonie has been under pressure year-to-date and has remained under pressure since the meeting. However, Friday’s Canada jobs report showing twice the number of jobs created as expected could see the prospect of said rate cut start to dim and offer some hope to the Loonie.
Senators’ questions might impact the USD
Jay Powell will be testifying in Washington DC for a second day on Wednesday, this time to the US Senate. The official statement will be almost a carbon copy of the one given to Congress as one would expect. The main potential for news flow that could impact the dollar will stem from the questions made by Senators. Before the testimony from Jay Powell, the Fed’s Patrick T Harper will be making a speech about the Economic Outlook at The Desmond Malvern in Pennsylvania.
