FOREX 4 minutes to read

NY Open: Oil price collapse sinks Loonie

Summary:  The Canadian dollar is taking the honours for being the worst performing G-10 major currency against the US dollar since yesterday’s New York close and for the week, as well.

Concerns about the ratification of the new US-Mexico-Canada trade agreement, USMCA, pummelled the Canadian dollat, as did a steep drop in oil prices and news that a US judge blocked progress on the Keystone XL Pipeline. A Canada-wide postal strike has prevented traders from seeking solace in newly legalised cannabis because it is only available by mail. USDCAD is trading at the top of its overnight range and threatening to test resistance at 1.3250.

Oil prices are leaking lower due to fears of slowing global growth, the US waivers allowing eight countries continue importing Iranian oil for a while, plus a surge in US oil production to 11.3 million barrels per day. WTI is trading just above the overnight low of $59.35/barrel.

Wall Street is in the red. The 2.4% drop in WTI oil prices overnight and weak China data spooked traders into selling to protect this week’s gains. The Federal Open Market Committee statement reminded traders that US rates were going higher in December and then probably every quarter next year as well.

Back to economic basics 

Hard economic data will be in the driver’s seat next week, although political drama will be lurking in row two, rather than at the back of the bus. 

Markets get a healthy dose of top-tier data beginning on Tuesday when German CPI, ZEW Sentiment survey and UK employment data are available. The unemployment rate is expected to be unchanged at 4%, but there is an upside risk to Average Earnings.

Tuesday is also the day Italy is supposed to present a revised budget to the European Union. Italy is expected to ignore the demand.

Wednesday has the potential to be the most volatile day. Asia has Australia Consumer Confidence, China Retail Sales, and Industrial Production. In Europe, German and Eurozone GDP will rival UK Inflation for prominence. Thursday, AUDUSD may get another boost from a robust employment report while US Retail Sales expectations should underpin the US dollar.
USDCAD 4-hour chart. (source: Saxo Bank)

Saxo Capital Markets (Australia) Pty Ltd prepares and distributes information/research produced within the Saxo Bank Group for informational purposes only. In addition to the disclaimer below, if any general advice is provided, such advice does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of trading any financial instrument as trading can result in losses that exceed your initial investment. Please refer to our Analysis Disclaimer, and our Combined Financial Services Guide and Product Disclosure Statement. All legal documentation and disclaimers can be found at

The Saxo Bank Group entities each provide execution-only service. Access and use of Saxo News & Research and any Saxo Bank Group website are subject to (i) the Terms of Use; (ii) the full Disclaimer; and (iii) the Risk Warning in addition (where relevant) to the terms governing the use of the website of a member of the Saxo Bank Group.

Saxo News & Research is provided for informational purposes, does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. No Saxo Bank Group entity shall be liable for any losses that you may sustain as a result of any investment decision made in reliance on information on Saxo News & Research.

To the extent that any content is construed as investment research, such content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication.

Please read our disclaimers:
- Full Disclaimer (
- Analysis Disclaimer (
- Notification on Non-Independent Investment Research (