Canadian Dollar Falls As Oil Prices Tumble Amid Coronavirus Fears
March 18 2020 - 06:25AM
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The Canadian dollar lost ground against its key counterparts
during the European session on Wednesday, after Brent crude oil
price fell below US$30 per barrel on demand worries from the spread
of coronavirus.
Benchmark Brent crude fell 2.8 percent to $27.92 a barrel, after
having fallen 4.3 percent on Tuesday. U.S. crude futures were down
more than 5 percent at $25.93 a barrel after losing 6 percent in
the previous session.
Oil prices came under pressure on account of lockdown and travel
restrictions in many countries sparked by the coronavirus
epidemic.
As major economies go into lockdown, the demand collapse from
the spreading coronavirus looks increasingly sharp.
On the economic front, the annual inflation rate in Canada fell
to 2.2% in February 2020 from 2.4% in the previous month.
The loonie dropped to more than a 4-year low of 1.4473 against
the greenback, compared to 1.4203 hit late New York Tuesday. The
loonie is poised to challenge support around the 1.50 mark.
The loonie fell to 9-day lows of 1.5812 against the euro and
74.38 against the yen, from its early highs of 1.5605 and 75.86,
respectively. The next possible support for the loonie is seen
around 1.59 against the euro and 73.5 against the yen.
In contrast, the loonie held steady against the aussie, after
having risen to 0.8459 earlier in the session. The pair had closed
Tuesday's deals at 0.8518.
Data from Westpac showed that Australia's leading index signaled
that the economy is entering an extremely difficult coronavirus
period.
The Westpac- Melbourne Institute leading index, which indicates
the likely pace of economic activity relative to trend three to
nine months into the future, fell to -0.96 percent in February from
-0.49 percent in January.
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