Oil price surge swamps USDCAD

Commodities 4 minutes to read

Summary:  The Canadian dollar soared in tandem with WTI crude oil prices following the release of today's EIA inventories data.


USDCAD collapsed from 1.3360 at the New York open to 1.3313 as of 14:15 GMT coinciding with a surge in WTI oil prices to $58.05/barrel from an overnight low of $57.04/b. The rally was fueled by a surprise decline in weekly crude oil stocks as reported by API yesterday and again this morning by the Energy Information Administration report showing Weekly Crude Stocks declining 3.86 million barrels. 

Shrinking inventories combined with global production declines and somewhat positive developments in the US/China trade talks are underpinning prices.

The USDCAD uptrend since October is intact while prices are above 1.3150 but prices are in correction mode today. The post- March 5 rally following the dovish Bank of Canada policy statement and outlook ran out of gas at 1.3465, making triple-top resistance. The subsequent retreat below support at 1.3380 and again at 1.3350 targets the 100-day moving average at 1.3290.

US dollar losses were not just confined to the Canadian dollar. The greenback is modestly lower against the major G10 currencies except for the Japanese yen and New Zealand dollar, which are unchanged after today’s US economic data improved risk sentiment.

Durable Goods Orders rose 0.4% in January, well above the -0.5% forecast, making the third consecutive gain for this data point. Construction spending was better than expected, rising 1.3% compared to 0.4% forecast and Producer Prices were a tad lower than estimated. Together, the data alleviates recession concerns while not giving any ammunition for higher interest rates.
Source: US Census Bureau
Wall Street liked the data and opened higher. The Dow Jones Industrial Average rose 0.48% as of 14:15 GMT, supported by a bounce in Boeing Corporation (BA: NYSE) shares. Prices are 0.52% higher but at $377.13, BA stock is well below Friday’s close of $422.50.
USDCAD (four-hour, source: Saxo Bank)
Disclaimer

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 https://www.home.saxo/en-au/legal/.

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 (https://www.home.saxo/en-au/legal/disclaimer/saxo-disclaimer)
- Analysis Disclaimer (https://www.home.saxo/en-au/legal/analysis-disclaimer/saxo-analysis-disclaimer)
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)

Saxo Capital Markets (Australia) Pty Ltd.
Level 25, 2 Park Street
NSW 2000
Sydney
Australia

Australia

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit www.home.saxo/en-au/about-us/awards

Saxo Capital Markets (Australia) Pty Ltd ABN 32 110 128 286 AFSL 280372 (‘Saxo’ or ‘Saxo Capital Markets’) is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms & Combined Financial Services Guide & Product Disclosure Statement to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Trading in leveraged products such as CFDs and Margin FX products may result in your losses surpassing your initial deposits. Saxo Capital Markets does not provide ‘personal’ financial product advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Capital Markets does not take into account an individual’s needs, objectives or financial situation.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc.

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website is not intended for residents of the United States and Japan.
Please click here to view our full disclaimer.