The USD/CAD exchange rate is having a volatile day so far. The US dollar is currently down 0.4% against the Canadian dollar and now at its lowest levels since April of 2018. The US currency was actually even weaker in the overnight session but recovered some on a higher than expected weekly initial jobless claims in the US, which some believe will make a large stimulus package more likely. Another reason for the strength of the Loonie against the Greenback is the fact that oil is up 2% this morning and at its highest level since before the pandemic. Finally the European Central Bank scaled up its emergency bond-buying program by more than a third and unveiled a new batch of ultracheap loans for banks, all of which has also fueled the volatility this morning. For its part, the Bank of Canada kept its tone on the Canadian dollar low key yesterday and did not take the opportunity to talk down the Loonie. We expect exchange rates to remain more volatile than usual for the rest of the day.
