- The loonie among the worst performing currencies, affected by risk aversion and falling oil prices.
- USD / CAD has one of the steepest daily gains in months.
The USD / CAD is up nearly 200 pips Monday at the start of the week amid a general rise in the dollar and a poor performance of the loonie. The price started the week at the 1.2600 area and has just risen to 1.2807, the highest level since mid-February.
The strong advance of the USD / CAD occurs in a context of fall in the stock markets and where oil extends the decline on Friday. Wall Street futures point to an open with the Nasdaq retracements of 0.35% and the Dow Jones of 1%.
Crude oil prices are down nearly 3%, with WTI trading below $ 70.00. The agreement of the Organization of the Petroleum Exporting Countries and its allies to inject more oil was reached after Saudi Arabia and the United Arab Emirates reached a compromise. Production by the end of the year is estimated to be two million barrels per day greater than today.
Another boost to the USD / CAD in addition to the strength of the dollar, has to do with technical issues. The price broke first 1.2600 and then 1.2650, another strong resistance, returning in the middle above the 200-day moving average for the first time since July 2020. The next strong resistance is around 1.2830 / 35.