The Canadian dollar is down 0.4% this morning as oil slumps. The exchange rate is now trading very near the Interchange Financial Short-Term Consensus Forecast (for end of March). Overall market sentiment is cautious this morning with equities looking to open down and bond yields also slightly down. The caution stems partly from Europe’s struggling vaccine rollout which has led to a likely third wave and caused Germany to extend its lockdown. Oil is down 4% and now at its lowest levels since mid February as worries about the uneven pace of global economic recovery dents demand expectations. Market participants will also be watching testimony by U.S. Federal Reserve Chair Powell later in the day for any hints about their tolerance for rising yields, which could impact USD to CAD.
