July 7, 2021

Don't Remember The Loonie Won't Be Impressed By Oil Market Uncertainty

 The Canadian dollar rose slightly from a two -month low against the U.S. dollar, amid uncertainty plaguing oil markets and a strengthening greenback dollar.

The decline in oil prices in the previous session, has caused the loonie dollar to plunge to lower. The cancellation of the OPEC+ meeting has sparked market uncertainty over future crude oil production, with the meeting ending without reaching an agreement.

Canada is a major exporter of commodities, including oil, so the loonie dollar has benefited this year from a recovery in oil prices that rose more than 50%.

However, the resurgence of the US dollar following market optimistic expectations of the Federal Reserve (Fed) will begin to ease stimulus in monetary policy, causing the loonie’s strengthening to stagnate.

The report of the Fed meeting minutes earlier this morning, is expected to give further clues on the central bank’s projections for an interest rate hike in 2023.

In the European session, the Canadian dollar traded 0.15% higher against the strong greenback dollar.

The market was seen cautious ahead of the release of the meeting minutes report, with the movement of major currencies and the USD limited around the same price.