Canadian Dollar Slides As Oil Prices Drop
10 May 2022 - 2:17PM
RTTF2
The Canadian dollar weakened against its major counterparts in
the Asian session on Tuesday amid falling oil prices, as the
European Union has rejected a plan to prevent the bloc's vessels
from carrying Russian oil to third countries.
Bloomberg reported that EU officials discarded the proposed ban
on transporting oil, but supported curbs for insurers.
Concerns that lockdowns in China would hurt demand also
underpinned oil prices.
Shanghai and Beijing tightened COVID-19 curbs on Monday amid
compliance to a strict "zero-Covid" policy to combat the
outbreak.
The move by the US Federal Reserve and other central banks to
tighten monetary policies in the wake of high inflation is sparking
fears about an economic slowdown and hurting equities.
The loonie reached as low as 1.3769 against the euro, its
weakest level since April 4. On the downside, 1.41 is possibly seen
as its next support level.
The loonie fell below the key 1.30 level against the greenback,
touching a 1-1/2-year low of 1.3037. The loonie may find support
around the 1.32 area.
The loonie retreated to 0.9076 against the aussie, from more
than a 3-month high of 0.9008 seen at 9 pm ET. The loonie is likely
to test support around the 0.92 level, if it drops further.
In contrast, the loonie rebounded to 100.47 against the yen,
from nearly a 2-week high of 99.60 it touched at 9 pm ET. The
loonie is seen finding resistance around the 102.5 level.
Looking ahead, German ZEW economic sentiment index for May is
due in the European session.
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