Loonie Continues to Shine Against US Dollar; Geopolitical Tensions on the Rise
Published April 11, 2018
WTI crude has gained more than 7% since Monday which bodes well for the continued momentum the loonie has seen against the greenback. After a particularly strong day for oil yesterday, price action overnight was dominated by new comments from Saudi Arabia’s oil minister who said he is happy with the oil market at present, walking back on previous reports that Saudi Arabia had an aspirational target for oil of $80/barrel.
US consumer prices fell for the first time in 10 months in March, weighed down by a decline in the cost of gasoline, but underlying inflation continued to firm amid rising prices for healthcare and rental accommodation. With today’s mixed US inflation data and mounting tensions in Syria, the dollar has extended early losses against the yen.
Geopolitical tensions – as risk fades for a global trade war, concerns rise over US intervention in Syria. This comes as preparations are being made by the US for a targeted response to the suspected chemical attack in Syria.
The Russian ruble extends slump against the dollar as heightened uncertainty in relation to US sanctions take their toll on foreign investment. Russia has warned that they will shoot down any US missiles in the region and Donald Trump has since sent a tweet to threaten that “they are coming”.
Market watchers now look forward to the release of FOMC meeting minutes (2pm EST), which will be closely scrutinized to assess the extent of Fed hawkishness as well as any directional indication about the pace of monetary tightening.