The U.S. dollar fell to a new low in more than two months against the Canadian dollar! Strong rise in oil prices supports the Canadian dollar

On Monday (October 11), the U.S. dollar against the Canadian dollar continued Friday’s decline and hit a new low in more than two months near 1.2450.


The Canadian dollar’s rise is due to the performance of crude oil prices. Crude oil is Canada’s main export commodity. Canadian employment data is also better than the US non-agricultural report.

WTI crude oil futures prices have risen to a new high since 2014. The market is worried that as Tropical Storm Pamela moves towards the Gulf of Mexico, it may hit this energy-rich region in the middle of this week and supply will be further interrupted. The positive news that the US stimulus plan and the economy is expected to recover from the epidemic may also be beneficial to oil prices.

Whether it is Canada’s net employment change, unemployment rate or average hourly wages, all of these data exceed the September employment data of the United States, helping the US dollar/Canadian dollar bears continue to gain the upper hand.

The non-agricultural employment population in the United States fell to 194,000 in September, which is expected to be 500,000, but the previous value was revised up to 366,000. At the same time, the unemployment rate fell to 4.8%, the previous value was 5.2%, and the forecast was 5.1%, alleviating some concerns. The average hourly wage increased by 0.6%, which is expected to be 0.4%, and the previous value was revised down to 0.4%.

On the other hand, the Canadian unemployment rate was in line with expectations, recording 6.9%, compared with the previous value of 7.1%. The number of employed people increased by 157,100 people, which is expected to increase by 65,000 people. In addition, the average hourly wage increased by 1.7% in September, which was higher than the previous value of 1.25%.

Although rising oil prices helped the US and Canadian dollar shorts, the US and Canadian markets were closed and concerns about the Fed's balance sheet reduction limit the exchange rate to fall further. In addition, risk aversion supports the dollar's safe-haven demand and also prevents the exchange rate from falling.

If the intraday closes below the 100-day moving average, the US dollar/Canadian dollar will point to near the July 30 low of 1.2423, and further down the 1.24 mark is worthy of attention.

On the upside, the 100-day moving average of 1.2487 and the 200-day moving average of 1.2512 will provide important resistance. Breaking the 200-day moving average will lead to short-term optimism.

(Daily chart of USD/Canadian dollar)

At 15:18 GMT+8, the US dollar was quoted at 1.2448 against the Canadian dollar.