Oil plunged, re-entering bear-market territory, as a surprise increase in American fuel stockpiles fueled worries about a growing glut, feeding into an increasingly dismal economic view. Futures in New York fell as much as 5.18% on Wednesday to the lowest in almost two months after an unexpected increase in U.S. inventories. Crude was also swept up in a global meltdown of equities and commodities after rate cuts in New Zealand, India and Thailand escalated recessions fears and spurred a flight to U.S. Treasuries and other safe havens.
The Canadian dollar has reacted accordingly, it has broken through its 60 day simple moving average, 1.32406 and its 90 day moving average, 1.32976. Currently it’s now in new trading territory and will likely stay in this range, the problem now for the Bank of Canada is that with today’s rate cuts it leaves it in a bit of a quandary. If it cuts rates, the CAD will weaken even further potentially putting it at odds with the U.S. who will call into question the BoC’s motives.
Currently Close Range
USDCAD 1.3335 1.3281 1.3268-1.3345
EURCAD 1.4971 1.4873 1.4857-1.4988
GBPCAD 1.6210 1.6158 1.6123-1.6219
CA: Ivey Purch Manager Index July 53.7 51.2
US: Petroleum Status Report wk8/2
Crude Oil Inventories -8.15M Brls 2.4M Brls
Gasoline -1.80M Brls 4.4M Brls