The price of oil is under increasing pressure. The global gloom coming from 3 corners of the world is hitting the black gold. Hurricanes, production problems and anything directly oil related seems to be brushed aside in the global sell-off.
Canada, which relies heavily on oil exports, is seeing its currency struggle, unable to take advantage of the USD sell off that comes alongside with the current gloom.
WTI Crude Oil, the western hemisphere prime measure, has fallen below the psychological level of $40 and to a fresh low since 2009. The battle with this closely watched level continues, but for CAD, the suffering is already significant.
USD/CAD reached a high of 1.3192, above the near term double top of 1.3175. The next level is the recent 6 year high of 1.3212.
What’s keeping USD/CAD from breaking higher? Well, CAD did break lower against other currencies. The dollar has its own troubles. Too many USD longs are being liquidated on the talk that the global gloom will postpone the rate hike from the Fed.
In addition, just a few hours beforehand we actually had good news from Canada: retail sales advanced more than expected in July and this gave a boost the loonie. Inflation is still on track, especially core inflation which the BOC tracks closely. This gave some support to the Canadian dollar, support that didn’t last too long with the crash.
Here is the Dollar/CAD chart:
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