The USDCAD pair was under serious fundamental pressure during the trading session on Tuesday. During the day, the Canadian dollar against the American competitor fell by 0.5% sifting to 1.4207. Market participants began to actively sell the "Canadian", fearing that the collapse of the oil market would exacerbate the economic crisis in the country, triggered by a pandemic of coronavirus infection. It is worth noting that similar concerns exist for all commodity currencies, whose dynamics strongly correlate with the dynamics of commodity raw materials, which are the main export resource for the region.
The oil market in recent days has set absolute records. Just yesterday, Brent crude fell 25%, closing the day below $ 20 per barrel. Pressure on quotes continues to be exerted by a drop in demand, as well as an increase in supply, which together led to a complete overstocking of available free storage facilities. A situation has already arisen in which oil simply has nowhere to go, and the unclaimed volume exceeds 15 million barrels per day. May futures for WTI oil, which was experimenting on Tuesday, closed at $ 10.01 per barrel, recovering at $ 47.64. The day before expiration, prices fell by 306%, for the first time in history, having completed trading in negative territory, $ -37.63 per barrel. Today at 17:30 Moscow time will be published a report on the change in oil reserves in the United States. According to the forecast, The Energy Information Administration may report record reserves growth of over 19 million barrels. If expectations are confirmed, oil decline will continue, which will put additional pressure on the Canadian dollar.
In addition, today at 15:30 Moscow time, data on inflation in Canada will be presented to traders. Recall that the Bank of Canada since March lowered the interest rate by 150 basis points and began to buy Canadian government bonds. He said last week that he could expand the asset buyback program to include provincial bonds if economic conditions continue to worsen. Thus, if today the consumer price index shows a decline, the Canadian regulator will have one more reason for further easing of monetary policy.
USDCAD BuyLimit 1.4120 TP 1.4280 SL 1.4070
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