The Loonie loses against majors and gains against the Greenback.

Daily Currency Update

CAD - Canadian DollarThe Loonie has increased versus the U.S. dollar by 0.23 percent, but it has fallen against the other majors (by 0.25 versus the Pound, 0.49 versus the Aussie dollar, 0.46 versus the Kiwi, and 0.18 percent versus the Japanese Yen). The Loonie is underperforming the other majors due to the 12 percent decrease in crude oil today and the continued downtrend. The increase of the equity market is helping the Loonie to increase against the U.S. dollar, as market participants bet on the effectiveness of fiscal and monetary policy supports. Crude oil fell below $13 a barrel again as global crude stockpiles made it more difficult for leading producers to balance the market by slowing output. In the U.S., the Fed is expected to sit tight this Wednesday amid a debate on whether the U.S. is heading into a deflationary environment, despite the trillions of dollars of stimulus added to offset the impact of the pandemic. Market-based gauges, like the PCE deflator, will be released this week and provide insights on how inflation is tracking against the Fed’s target. With crude oil at depressed levels and the Fed committing to do more as needed in response to the pandemic, US Treasury yields could be vulnerable to the downside. A correction in yields generally comes with a weaker USD, but that correlation is not static and can be overran by the USD’s safe-haven status, as we saw in March.