Published on: 2024-01-15
The canadian dollar edged lower against the dollar on Monday as oil gave back much of its earlier gains and ahead of domestic inflation data due later this week that could offer clues on the BOC’s rate decision.
Oil prices pulled back from its two-week high, which was made after air and sea strikes by the US and Britain on Houthi targets in Yemen. Both benchmarks jumped more than 2% last week.
Meanwhile, Alberta’s oil production rose above 4 million bpd for the first time in Nov as oil-sands companies ramped up output as an expansion of Canada’s largest export pipeline will increase new export capacity 0f 590,000 bpd.
Coupled with renewed shale boom, the added Canadian production may weigh on global oil markets, which has found it onerous to return above $80 under the weight of swelling inventories.
Global consumption of petroleum and other liquids hit a record high last year and is forecast to increase further in both 2024 and 2025, but that does not necessarily mean prices will rise, according to the EIA.
A stronger dollar has been another contributor to the loonie’s second straight weekly fall. Both the US employment report and inflation print prove that policymakers are likely in no rush to make a judgement in March.
The dollar is consolidating against the loonie after a rally from its mulita-month low. The rectangle pattern is formed on 1-hour chart. A break above the 200 SMA may prompt the pair to test the area around 1.3600.
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