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Record increase in oil prices fuel Canadian dollar upswing

business-articlesRecord increase in oil prices fuel Canadian dollar upswing
  • Odds of further ECB action drag on euro (EUR)
  • Canadian dollar (CAD) boosted by oil price surge
  • Rising Middle East tensions benefit US dollar (USD)
Euro looks for rally on improved economic confidence
The euro declined at the start of the week when European Central Bank (ECB) chief economist, Philip Lane signalled further monetary loosening when he said the bank remains committed to meeting its inflation target.
The mood towards the single currency could improve if the ZEW economic sentiment surveys for September meet forecasts and show an improvement, encouraging bets that near-term growth will improve.
Declining manufacturing sales forecast to reverse Canadian dollar gains
The commodity-correlated Canadian dollar saw strong gains yesterday as Brent crude recorded its single largest price hike. This came in the wake of an explosive drone attack on Saudi oil facilities, which took approximately 5% of the global supply offline.
However, the bullish mood could fade today as forecasts point toward another monthly decline in Canadian manufacturing sales.
Fresh signs of a slowing Canadian economy could drive CAD exchange rates into a downtrend, even if oil markets maintain their momentum.
US dollar momentum likely to fade on manufacturing weakness
Escalating geopolitical tensions helped to buoy the US Dollar, even as worries over the health of the US manufacturing sector persisted.
A general increase in safe-haven demand could keep USD exchange rates on a positive footing today, but the mood towards the US dollar could sour if August’s manufacturing production figures show a fresh loss of momentum.
Upcoming Data:
Tuesday, 17th September 2019
10:00 EUR ZEW Economic Sentiment Index
13:30 CAD Manufacturing Sales
14:15 USD Manufacturing Production
Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

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