Canadian Dollar Falls On Slump In Oil Prices
April 20 2020 - 03:35AM
RTTF2
The Canadian dollar fell against its major trading partners in
the European session on Monday, a massive decline in global demand
for crude and uncertainty around storage of excess supply pushed
down oil prices.
Benchmark Brent crude for June delivery fell $1.13 to $26.95 per
barrel.
With global economies remaining on lockdown due to the virus
outbreak, oil demand has fallen sharply, causing a build in
stockpiles.
Monday's plunge comes despite a historic production cut aimed to
backstop prices by Russia and other oil-producing nations. Earlier
this month, OPEC and its allies finalized an unprecedented
production cut of nearly 10 million barrels, or a tenth of global
supply, to boost prices amid the coronavirus pandemic.
The International Energy Agency has warned that the output cuts
may not be enough to offset a severe plunge in oil demand. The IEA
expects a 29 million barrel per day (bpd) dive in April oil demand
to levels not seen in 25 years.
The loonie declined to 0.8988 against the aussie, its weakest
since March 10. The currency may locate support around the 0.92
level.
The loonie depreciated to a 4-day low of 1.4132 against the
greenback, after rising to 1.4014 in the Asian session. Further
decline in the currency is likely to see support around the 1.46
level.
The loonie weakened to a 4-day low of 76.30 against the yen,
from Friday's closing value of 76.78. The next key support for the
currency is seen around the 72.00 level.
Data from the Ministry of Finance showed that Japan posted a
merchandise trade surplus of 4.946 billion yen in March.
That was well shy of forecasts for 459.9 billion yen and down
sharply from the 1,109.8 billion yen surplus in February.
The loonie slid to 1.5340 against the euro, setting a 4-day low.
The loonie is likely to challenge support around the 1.55 mark.
Data from Eurostat showed that the euro area trade surplus
increased in February as exports increased from January amid a fall
in imports.
The trade surplus rose to a seasonally adjusted EUR 25.8 billion
in February from EUR 18.2 billion in January.
Canada wholesale sales for February are set for release at 8:30
am ET.
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