Summary:
The Canadian dollar rose Tuesday as investors grew cautious before US tariffs. Oil prices surged amid fears of more sanctions on Russia and Iran.
The Canadian dollar firmed on Tuesday, as investors grew risk-averse ahead of US trade tariffs expected to be unveiled this week. Oil prices jumped on fears Trump will impose more sanctions on Russia and Iran.
Speculators have reduced their bearish bets on the currency to the least since October, CFTC data released on Friday showed. Loonie has been flat so far this year after the greenback's recent rally.
New Canadian PM Carney has called a snap election for 28 April, saying he needed a strong mandate to deal with the threat posed by Trump, who "wants to break us so America can own us."
The comments highlighted that relations between the two countries significantly deteriorated since Trump imposed tariffs on Canada and threatened to annex it as the 51st state.
The country's GDP grew by 0.4% on a monthly basis in January as economic activity continued the momentum of the last few of months. A series of rate cuts has helped boost consumer spending and investment.
The mining, quarrying, and oil and gas extraction and manufacturing sectors were the largest contributors to growth. The oil and gas extraction subsector registered the biggest growth amongst them with 2.6% expansion in January.
The Canadian dollar dipped below 50 SMA, but it seemed to find some support at 1.440 per dollar hit on 20 March. If it holds above the level, a rally towards 1.430 per dollar is likely.
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