Daily Afternoon Report 18.04.2016
The U.S. dollar dollar climbed against its Canadian counterpart on Monday, as tumbling oil prices dampened demand for the commodity-related Canadian currency, although the greenback’s gains were limited by Friday’s downbeat U.S. data.
USD/CAD hit 1.2990 during early U.S. trade, the pair’s highest since April 11; the pair subsequently consolidated at 1.2897, gaining 0.64%.
The pair was likely to find support at 1.2792, Friday’s low and resistance at 1.3157, the high of April 8.
Oil prices plummeted after a meeting of the world’s major oil producers in Doha, Qatar on Sunday ended without an agreement on curbing production intended to prop up prices.
The talks collapsed after Saudi Arabia demanded that Iran also join the agreement to cap output.
Iran had already declined to take parts in the talks and said it would not participate in an output freeze until its output levels return to where they were before international sanctions were imposed over its nuclear program.
Meanwhile, the greenback remained under pressure after reports showing that U.S. industrial production fell more than expected in March and consumer sentiment deteriorated slightly this month.
The reports underlined the view that the Federal Reserve is likely to stick to a cautious approach on future interest rates increases.
In Canada, data on Monday showed that foreign securities purchases rose by C$15.94 billion in February, exceeding expectations for an increase of C$7.50 billion. Foreign securities purchases rose by C$11.41 billion in January, whose figure was revised from a previously estimated C$13.51 billion gain.
The loonie was lower against the euro, with EUR/CAD advancing 0.83% to 1.4582.