Canadian Dollar Falls As Oil Prices Tumble, Trade Worries Mount
May 23 2019 - 5:49AM
RTTF2
The Canadian dollar fell against its major counterparts in the
European session on Thursday, as oil prices declined on rising
crude supplies as well as weak global cues on the back of Brexit
worries, U.S-China trade spat and weak economic data from the euro
area.
British chip designer ARM joined the growing list of global
companies to disengage with Huawei, raising concerns a protracted
trade war could derail global economic growth.
Oil prices extended its decline as data from Energy Information
Administration showed a sharp jump in U.S. crude stockpiles last
week.
EIA reported that U.S. crude inventories rose as much as 4.7
million barrels last week, as against expectations for a drop of
about 600,000 barrels.
In the U.K., PM Theresa May is under intense pressure to
announce a departure date on Friday amid growing cabinet backlash
against the withdrawal agreement bill.
Committee Chairman Graham Brady remarked that it may change
rules to hold a no-confidence vote in the PM, if she refuses to
announce a resignation date.
Soft factory and services PMI reports from Germany and Eurozone,
along with weak reading on German business morale added to
worries.
The currency was lower against its major counterparts in the
Asian session, excepting the aussie.
The loonie declined to a 2-day low of 0.9268 against the aussie
from Wednesday's closing value of 0.9244. The loonie is likely to
test support around the 0.94 region.
The loonie that finished Wednesday's trading at 1.3437 against
the greenback slipped to a 6-day low of 1.3493. Next key support
for the loonie is seen around the 1.37 level.
The Canadian currency weakened to a 6-day low of 81.54 against
the yen, compared to 82.13 hit late New York Wednesday. The loonie
is seen finding support around the 80.00 region.
Survey from Nikkei showed that Japan manufacturing PMI fell in
May, posting a manufacturing PMI score of 49.6.
That's down from 50.2 in April and it falls beneath the
boom-or-bust line if 50 that separates expansion from
contraction.
The loonie fell to a 3-day low of 1.5013 against the euro from
yesterday's closing quote of 1.4979. If the loonie drops further,
1.52 is possibly seen as its next support level.
Survey results from the Ifo Institute showed that Germany's
business confidence weakened for a second straight month and at a
faster-than-expected pace in May.
The Ifo business confidence index fell to 97.9 from 99.2 in
April. Economists had forecast a score of 99.1.
Looking ahead, U.S. new home sales for April are scheduled for
release shortly.
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