Loonie losing streak continues despite gains with crude prices

The Canadian dollar declined against the greenback ahead of Wednesday’s Bank of Canada (BOC) rate decision that is now widely expected to keep rates on hold due to a recent round of softer data.  Early in December, rate hike expectations was firmly pricing in a rate hike for the March 6th meeting, now expectations are only seeing a 10% chance of rate rise throughout the summer.

With inflation falling to a 15-month low in January and GDP for the fourth quarter coming in at the slowest pace since the second quarter in 2016, the Bank of Canada will need to have a wait and see approach before resuming their tightening cycle.


Canada’s largest export, crude is having a positive day as optimism grows that a trade deal will be reached by the US and China.  Market participants will closely watch Wednesday’s EIA crude inventory data.  Current expectations are for a build of 1.2 million barrels, the prior week saw a draw of 8.6 million barrels.  We will most likely continue to see imports continue to fall, but we may see that ease up following last week’s drastic decline that was a 23-year low.

Oil prices are currently being supported by improved compliance from Russia and expectations that the OPEC + production cuts will last till the end of the year.  The easing of tensions with India-Pakistan conflict are also supporting prices as stability in the region would not disrupt demand.  The trend of rising US production however will keep oil’s rally from getting away of itself.  The risk-on story will keep oil stable, but ultimately the supply-side will likely cap any major rally.


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Ed Moya

Ed Moya

Contributing Author at OANDA
With more than 20 years’ trading experience, Ed Moya was a Senior Market Analyst with OANDA for the Americas from November 2018 to November 2023. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Prior to OANDA he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business, cheddar news, and CoinDesk TV. His views are trusted by the world’s most respected global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Seeking Alpha, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.