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Loonie Held Back by Risk-Off Trades; Market Awaits Bank of Canada

Published April 12, 2017
  • The Canadian dollar is struggling to lock in gains against the US dollar this morning as risk aversion pushes investors away from the loonie despite rising oil prices
  • Equities are lower and safe-haven currencies such as the Japanese yen are higher as the market maintains a “risk-off” mode due to tensions in North Korea and Syria and continued uncertainty over the French presidential election
  • Today’s Bank of Canada decision is also keeping CAD within range as investors await further information from BoC Governor Stephen Poloz; the Bank of Canada is widely expected to leave rates unchanged at 0.50 percent
  • The Canadian dollar’s value will react to the Bank of Canada press conference at 11:15 AM EST; recent positive domestic data could indicate that the Bank will raise their forecast for Canada, however, analysts expect further cautiousness from the BoC
  • Oil prices are on track for a 7% rally since their last decrease on April 3; geo-political tensions are keeping the commodity’s price high with further support from an unexpected decline in US oil stockpiles (as per data from the American Petroleum Institute yesterday)
  • Prices jumped nearly .5% today after reports that Saudi Arabia is currently lobbying OPEC members and other producers to extend a production cut beyond the original June 2017 deadline; the OPEC deal to cut also boasted a 104% compliance rate in March 2017