something interesting

<  BACK TO Market Analysis

PIG TODAY -USD/CAD Canadian Dollar Lower After Six Banks Downgraded

The loonie was lower against the US dollar despite commodities rising. Moody’s downgraded six major Canadian banks citing high private and household debt that have fuelled a housing bubble. The concerns about a potential crash and its effect on the losses to the financial sector prompted the decision by the ratings agency. Prime Minister Justin Trudeau addressed the downgrades and admitted to the challenges around housing.

The price of oil rose continuing its gains from yesterday after the fall in weekly US crude inventories but it could offer little support to the Canadian dollar that has been caught amidst rising questions about the overall health of the financial sector after Home Trust Capital saw withdrawals wipe out its long term deposits. Housing speculation has been a known subject that has been discussed by major organizations and the government but with historic low rates it has dominated headlines and household budgets.

Reuters reported that Steve Verheul, the negotiator behind the trade agreement between Canada and Europe will head the NAFTA talks. The Trump administration will go into the negotiations in a position of strength after imposing tariffs on softwood lumber and threatening to abandon the deal altogether took a toll on the loonie.

The USD/CAD gained 0.298 percent in the last 24 hours. The currency pair is trading at 1.3694 after the Moody’s downgrade threw a curveball to the CAD. A housing bubble in particular in the two largest cities has been going on for years fuelled by historic low rates. Rising household debt has urged the ratings agency to downgrade the standing of the six major Canadian banks. Delinquency rates are low… but so are interest rates. There are multiple question marks on what will happen when rates go up and people cannot afford to service those mortgages.

The Canadian dollar was down from Wednesday when oil prices spiked following a larger than expected drawdown in the US. The correlation between oil and the loonie is strong, but turbulence in the solid Canadian financial system gave investors cause to break that correlation as they sold the CAD.

There are various calls around the market urging the Bank of Canada to raise interest rates to cool down the overheating housing market but with low inflation, low oil prices and a forecasted slower growth in the second quarter it is questionable the BoC can follow through on that advice.

Oil gained 1.172 percent on Thursday. The price of West Texas is trading at $47.65 following a move that started yesterday with the higher than anticipated drawdown in US inventories. The deal to curb production by the Organization of the Petroleum Exporting Countries (OPEC) and major producers such as Russia stabilized prices since the details were still being hashed out last year. Originally a six month agreement, the group will meet on May 25 to discuss an extension. US producers have benefited from higher prices and have ramped up production minimizing the overall effect of the OPEC deal on prices.

Gold gained 0.545 percent in the last 24 hours. The yellow metal is trading at $1,224.52 after a second day in positive territory. The USD rally that started at the beginning of the week is losing some steam. Fed comments has stoked the USD rally and put downward pressure on the yellow metal, but US political risk after the firing of FBI Director James Comey is keeping the safe haven asset bid.

Source: marketpulse.com

The loonie was lower against the US dollar despite commodities rising. Moody’s downgraded six major Canadian banks citing high private and household debt that have fuelled a housing bubble. The concerns about a potential crash and its effect on the losses to the financial sector prompted the decision by the ratings agency. Prime Minister Justin Trudeau addressed the downgrades and admitted to the challenges around housing.

The price of oil rose continuing its gains from yesterday after the fall in weekly US crude inventories but it could offer little support to the Canadian dollar that has been caught amidst rising questions about the overall health of the financial sector after Home Trust Capital saw withdrawals wipe out its long term deposits. Housing speculation has been a known subject that has been discussed by major organizations and the government but with historic low rates it has dominated headlines and household budgets.

Reuters reported that Steve Verheul, the negotiator behind the trade agreement between Canada and Europe will head the NAFTA talks. The Trump administration will go into the negotiations in a position of strength after imposing tariffs on softwood lumber and threatening to abandon the deal altogether took a toll on the loonie.

The USD/CAD gained 0.298 percent in the last 24 hours. The currency pair is trading at 1.3694 after the Moody’s downgrade threw a curveball to the CAD. A housing bubble in particular in the two largest cities has been going on for years fuelled by historic low rates. Rising household debt has urged the ratings agency to downgrade the standing of the six major Canadian banks. Delinquency rates are low… but so are interest rates. There are multiple question marks on what will happen when rates go up and people cannot afford to service those mortgages.

The Canadian dollar was down from Wednesday when oil prices spiked following a larger than expected drawdown in the US. The correlation between oil and the loonie is strong, but turbulence in the solid Canadian financial system gave investors cause to break that correlation as they sold the CAD.

There are various calls around the market urging the Bank of Canada to raise interest rates to cool down the overheating housing market but with low inflation, low oil prices and a forecasted slower growth in the second quarter it is questionable the BoC can follow through on that advice.

Oil gained 1.172 percent on Thursday. The price of West Texas is trading at $47.65 following a move that started yesterday with the higher than anticipated drawdown in US inventories. The deal to curb production by the Organization of the Petroleum Exporting Countries (OPEC) and major producers such as Russia stabilized prices since the details were still being hashed out last year. Originally a six month agreement, the group will meet on May 25 to discuss an extension. US producers have benefited from higher prices and have ramped up production minimizing the overall effect of the OPEC deal on prices.

Gold gained 0.545 percent in the last 24 hours. The yellow metal is trading at $1,224.52 after a second day in positive territory. The USD rally that started at the beginning of the week is losing some steam. Fed comments has stoked the USD rally and put downward pressure on the yellow metal, but US political risk after the firing of FBI Director James Comey is keeping the safe haven asset bid.

Source: marketpulse.com

lastest Articles

Market Analysis
Gold probes multi-day lows around $1,790/oz
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD Price Analysis: A test of 1.1420 appears closer
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: US dollar seizes control as risk aversion returns, a busy docket ahead
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold to stay above $1800 fueled by lower real rates
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
ECB expected to keep rates unchanged
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Vaccine, earnings optimism downs the dollar; eyes on COVID-19 stats, BOE’s Bailey
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Week Ahead – Bring on Earnings Season
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Crude Oil Futures: Upside looks limited
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
ECB’s Lagarde: Economic recovery would be constrained, uncertain and fragmented
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Gold eyeing $1,800, dollar mixed, as coronavirus, Hong Kong peg move markets
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold Price Analysis: Holds steady above $1775 level, bullish bias remains
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
BOJ to project economic recovery in report next week – Reuters
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Chinese optimism downs dollar as investors ignore US coronavirus, data eyed
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Week Ahead – Economic Reopening Continues
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Stocks' strength, dollar downing face Non-Farm Payrolls test as Trump endorses masks
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
BoE's Haskel: Activity appears to be coming back faster than anticipated
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Company News
GBP Bank Account
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Gold shines, markets look for direction after a successful Q2, ahead of busy start to Q3
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold eases below $1770 level, downside seems limited
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD: Europe fights coronavirus and stuns the dollar
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Markets attempt to shrug off grim coronavirus developments
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Week Ahead – Jitters Continue into Busy Week
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
US Dollar Index clings to gains near 97.50 ahead of data
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
ECB’s Lagarde: Economic recovery will be a complicated matter
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold sticks to the positive outlook
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD Price Analysis: Focus now shifted to 1.1170
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Dollar dominates, gold shines as coronavirus rages in the US, triple data release eyed
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD Price Analysis: Rising bets for a test of 1.1400 and beyond
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD recedes from tops above 1.1300
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold: Falling US Real Yields fuels bull trend towards new highs at $1921 – Credit Suisse
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Risk rides the Navarro rollercoaster, Eurozone/ UK PMIs, virus stats in focus
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
BoE is seen increasing further the size of QE – UOB
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Risk-recovery back in play, US dollar recedes with second-wave virus fears
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Week Ahead – Markets play tug-of-war with Covid-19 concerns and reopening momentum
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Coronavirus, weak data outweigh reopening optimism, BOE, jobless claims eyed
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
ECB's de Guindos: Better if EU aid is distributed via grants rather than loans
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold Price Analysis: XAU/USD slumps toward $1,710 on improving risk sentiment
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Dollar up as health, geopolitics replace consumer optimism, Powell, COVID-19 data eyed
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold clings to modest daily gains, around $1730 area
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Double stimulus talk downs dollar ahead of Powell's power-play, US retail sales
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Coronavirus concerns trigger dollar domination, commodity currencies climb down
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Week Ahead – Market Recovery Under Threat?
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Houston, we have a problem, US coronavirus, Fed gloom, crash markets, consumers eyed
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Obsessed
Killing Hope ( Before it Kills You )
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Euro Fails at Resistance as Federal Reserve Expands Lending Program
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Can the dollar lick its wounds? Fed speculation, geopolitics, and data eyed
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
GBP/USD: Brexit, coronavirus and protests to pressure the pound
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold: The beginning of the end, $1600 by Q3
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Dollar looking for a new direction after the excellent Non-Farm Payrolls, Lagarde eyed
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Week Ahead – The Recovery Continues
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD: 1.1333 initial target reached, aims 1.1495 March peak – Commerzbank
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Crude Oil Futures: Cautiously positive
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Risk-on mood continues downing the dollar and yen, will Non-Farm Payrolls change that?
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Breaking: ECB leaves key rates unchanged, expands PEPP by €600 billion
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
ECB press conference: Lagarde speech live stream – June 4
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Dollar struggles to recover as US protests calm, data beats, all eyes on ECB stimulus
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD: Room for further gains, albeit with a temporary retreat
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold Price Analysis: XAU/USD drops back to $1720 amid risk-on rally in equities
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: US unrest? Stocks remain restless, extend surge, dollar dives to new lows, top NFP hints eyed
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold Price Analysis: XAU/USD finds resistance near $1,745, drops toward $1,730
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Russian oil output falls to 9.39 million bpd in May, close to OPEC+ goal – Interfax
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
GBP/USD: Brexit breakthrough and US demonstrations over George Floyd death to boost the pound
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Week Ahead – Sino-US Tensions Come to the Fore
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Crude Oil Futures: Look neutral near-term
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Only a correction? Dollar trying to lick its wounds amid Sino-American tensions
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Company News
Archiving Inactive Accounts & Server Boost
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Trump urges states to open ‘ASAP’ as Dow surges
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold Price Analysis: Battle lines well-defined, can it break higher?
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Vaccine, Opening optimism overwhelms dollar, Sino-American tensions ignored (for now)
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD: At risk of extending its slide
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Russia to temporarily ban oil product imports – Interfax
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Dollar in demand amid high Sino-American tensions, thin liquidity expected
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Week Ahead – Reopening Momentum and China in focus
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
BOE’s Ramsden: It is reasonable to have an open mind on negative rates
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
FOMC minutes: Ready to pump in extra stimulus – UOB
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Oil prices tumble alongside global equities amid fears about China turbulence
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
PBoC keeps extra easing on the table – UOB
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
US Dollar Index Price Analysis: Door open to further retracements
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold Price Forecast: XAU/USD Rally Loses Steam
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
US Crude Oil Stocks Change at -5 million barrels in week ending May 15
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold: Investors continue buying the yellow metal
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Dollar decline resumes after breather due to vaccine doubts, Fed remains in focus
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Powell speech: Continuing to look at ways to accommodate additional borrowers
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Reasons for the US dollar weakness
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold Price Analysis: Needs to recapture $1,747 to resume rally
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
After two months, regulators remove short-selling bans
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD: The downside is more appealing than the upside
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Play down Powell and risk-on, markets also ignore Sino-American tensions, gold shines
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Week Ahead – More Easing on the Way
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
UK: Major downgrade to the GDP forecast – ABN Amro
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
RBNZ: Rates on hold, QE expanded – UOB
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Dollar dominates after Powell's push back, darkening global clouds, ahead of claims
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EIA: US Crude Oil Stocks Change at -0.7 million barrels in week ending May 8
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Breaking: FOMC Chairman Powell says additional policy measures may be needed
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Euro Latest: EUR/USD Could Break Lower, Powell Speech in Focus
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Oil storage crisis fading on global production cuts and recovering demand
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Fed's Bullard: Cannot continue economic shutdown for too long
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold Price Analysis: Sustains the bounce above $1700 ahead of US CPI
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold trades with modest gains, just above $1700 mark
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
US Dollar in Favour vs EUR/USD & GBP/USD, CHF Bulls Rise - COT Report
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613