– Loonie ignoring high oil prices
– EU planning new stimulus
– US dollar opens with gains except against EUR
USDCAD Snapshot: open 1.2833-37, overnight range-1.2798-1.2838, close 1.2820, WTI open $122.78, Gold open $2,006.00
The Canadian dollar fell further overnight despite rising oil prices and even an improvement in risk sentiment in Europe, failed to give the Loonie much support.
West Texas Intermediate prices continued to consolidate Monday’s gains in a $117.17-$123.26/barrel range. Germany balked at imposing sanction on imports of Russian energy as they would rather not cripple their economy in an effort to punish Russia for invading the Ukraine. However, the US is still contemplating sanctions on Russian oil imports into America, which is keeping oil prices supported.
Nickel took the spotlight in Europe after the London Metal Exchange (LME responded to a 250% surge in nickel prices by suspending trading. Nickel touched $100,000 per ton briefly which created headaches for brokers having to respond to margin calls. China’s Tsingshan Holding Group Co., the world’s largest nickel and stainless steel producer has been seriously impacted.
Asia equity markets closed deep in the red, following Wall Street’s negative close. Japan’s Nikkei 225 lost 1.71% and Australia’s ASX 200 lost 0.83%. European bourses started out in negative territory but turned positive following news that the EU planned a massive stimulus package. The French CAC index led the rally, gaining 1.94% followed by Germany’s DAX index which gained 1.45%.
The Canadian dollar is being undermined as risk averse investors scramble for safe-haven US dollars. However, the level of oil prices, and the Bank of Canada’s stated plans for a series of rate hikes should limit Canadian dollar losses.
EURUSD squeezed out gains, rising from 1.10850 to 1.0921 following the report of the planned EU stimulus. The rally was exacerbated due to short EUR positioning and will be short-lived on any adverse development in the Ukraine. German Industrial Production and Eurozone GDP data did not have any impact on FX trading.
GBPUSD tracked EURUSD gains rising from 1.3083 to 1.3132 band. Price action continues to be dictated by headlines and that won’t change today.
USDJPY traded higher, due to rising US Treasury yields. The 10-year yield climbed to 1.866% which drove prices from 115.29 to 115.74.
US and Canada trade data is due.