Canadian Dollar slumping back amidst Crude Oil declines, US data misses the mark


  • The Canadian Dollar is getting dragged down by declining Crude Oil bids.
  • Housing Starts in Canada tick upward, overshadowed by US unemployment figures.
  • WTI Crude Oil slumps below $74 per barrel.

The Canadian Dollar (CAD) is getting pushed back into recent lows against the US Dollar (USD) as declining Crude Oil and softening risk appetites weighed on the Loonie.

Canada saw a welcome bump in annualized Housing Starts in October, but the figure was entirely overshadowed by a miss for US Initial Jobless Claims, which is dragging down market sentiment.

Daily Digest Market Movers: Canadian Dollar on the back foot with no support from Crude Oil

  • US Initial Jobless Claims rise to their highest level in nearly two years, market narrative tilts back toward fears of a harder-than-soft landing.
  • 231K new unemployment benefit claims are reported in the US for the week of November 10 versus forecast 213K; previous week revised from 217K to 218K.
  • US Industrial Production also declined past forecast, printing at -0.6% for October against the forecast decline to -0.3%. September’s Industrial Production printed at just 0.1% after being revised down from 0.3%.
  • Canadian Housing Starts for the year into October ticked upward, 274.7K new homes started construction, well over the expected 252.9K, climbing over September’s reading of 270.7K.
  • Despite production cap quotas, OPEC member countries continue to export more oil than expected, sending Crude Oil lower on Thursday.
  • West Texas Intermediate (WTI) Crude Oil is trading back down below $74.00/barrel, pulling the plug on CAD support in the markets.
  • CAD: Limited scope for near-term gains – Scotiabank

Technical Analysis: Canadian Dollar bounces off 50-day SMA, USD/CAD sees rejection from rising trendline

The USD/CAD reclaimed the 1.3700 handle during Thursday trading, setting the pair up for a fresh run at 1.3800.

The early week’s declines saw the USD/CAD ease into a near-term low of 1.3654 before getting a clean bounce off of the 50-day Simple Moving Average (SMA) and a rising trendline drawn from July’s lows near 1.3100.

Long-term technical support comes from the 200-day SMA sitting near the 1.3500 handle. A bullish extension for the USD/CAD will see bidders looking to take another run at cracking the 1.3900 handle at November’s high bids.

USD/CAD Daily Chart

Canadian Dollar price today

The table below shows the percentage change of Canadian Dollar (CAD) against listed major currencies today. Canadian Dollar was the weakest against the Japanese Yen.

USD   -0.07% 0.00% 0.60% 0.55% -0.51% 0.65% 0.08%
EUR 0.06%   0.05% 0.66% 0.59% -0.46% 0.71% 0.12%
GBP 0.01% -0.03%   0.62% 0.55% -0.49% 0.70% 0.11%
CAD -0.60% -0.63% -0.61%   -0.09% -1.11% 0.06% -0.52%
AUD -0.53% -0.59% -0.56% 0.07%   -1.04% 0.14% -0.44%
JPY 0.51% 0.45% 0.50% 1.11% 1.05%   1.16% 0.59%
NZD -0.65% -0.72% -0.66% -0.04% -0.14% -1.17%   -0.58%
CHF -0.10% -0.15% -0.09% 0.51% 0.45% -0.60% 0.56%  

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).

Risk sentiment FAQs

In the world of financial jargon the two widely used terms “risk-on” and “risk off” refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.

Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.

The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.

The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.

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