Never miss a story from Martin Essex

Subscribe to receive daily updates on publications
Please enter valid First Name
Please fill out this field.
Please enter valid Last Name
Please fill out this field.
Please enter valid email
Please fill out this field.
Please select a country

I’d like to receive information from DailyFX and IG about trading opportunities and their products and services via email.

Please fill out this field.

Your Forecast Is Headed to Your Inbox

But don't just read our analysis - put it to the rest. Your forecast comes with a free demo account from our provider, IG, so you can try out trading with zero risk.

Your demo is preloaded with £10,000 virtual funds, which you can use to trade over 10,000 live global markets.

We'll email you login details shortly.

Learn More about Your Demo

You are subscribed to Martin Essex

You can manage your subscriptions by following the link in the footer of each email you will receive

An error occurred submitting your form.
Please try again later.

CAD price, news and analysis:

  • Crude oil prices are still advancing and that should have strengthened the Canadian Dollar as Canada is a major oil producer.
  • Instead, CAD is weakening on political concerns and a dovish central bank.

Rising crude oil prices

Crude oil prices are continuing to trend higher as supply cuts by OPEC and its allies, plus US sanctions on Venezuela, outweigh record US output and rising US inventories. US stockpiles rose much more than expected last week, with inventories up by 7.1 million barrels to 452.93 million barrels, according to a weekly report by the US Energy Information Administration Wednesday.

US Crude Oil Price Chart, Daily Timeframe (December 14, 2018 – March 7, 2019)

Latest US crude oil price chart.

Chart by IG (You can click on it for a larger image)

USDCAD price firms

Usually, that would boost the Canadian Dollar as Canada has the world’s third largest oil reserves after Venezuela and Saudi Arabia. However, the US Dollar is continuing to advance against it, as the chart below shows.

USDCAD Price Chart, Hourly Timeframe (March 1 – March 7, 2019)

Latest USDCAD price chart.

Chart by IG (You can click on it for a larger image)

For now, Canadian politics and a dovish Bank of Canada are outweighing the impact of higher oil prices. On the political front, Canadian Prime Minister Justin Trudeau is caught up in a scandal involving allegations made by Canadas former attorney general, Jody Wilson-Raybould, who says Trudeau and his inner circle intervened inappropriately in the criminal prosecution of a major engineering firm.

At the same time, the Bank of Canada said Wednesday that the economic outlook continues to warrant interest rates below their neutral range, estimated at around 2.5% to 3.5%. It left its benchmark rate at a much lower 1.75% and its tone was less hawkish than previously.

That change may have reflected news Friday that the Canadian economy expanded at an annualized rate of just 0.4% in the last quarter of 2018 as the country posted its weakest quarterly growth since the middle of 2016.

While the link between the oil price and the currency is unlikely to have broken long-term, for now economic and political concerns look to be more important for the USDCAD price.

Resources to help you trade the forex markets:

Whether you are a new or an experienced trader, at DailyFX we have many resources to help you:

--- Written by Martin Essex, Analyst and Editor

Feel free to contact me via the comments section below, via email at martin.essex@ig.com or on Twitter @MartinSEssex