Listen to the market mood for the AUDCAD currency pair in the coming session.
The Bank of Canada surprised markets with a 50bps rate cut yesterday. Markets had only been expecting a 25bps rate cut, so this resulted in immediate CAD weakness. Furthermore, OPEC’s Ministerial meeting was not able to reach an agreement about future cuts, so oil prices were pressured which further weighed on CAD
With Asian equity markets heavily in the green, this AM the European market is likely to open in a very risk-on mood and supporting AUD strength.
Expect AUDCAD buyers at market and pullbacks as long as risk tone remains ‘on’.
Risk to this outlook
Any negative coronavirus related news that will result in risk-off moves or news of large OPEC production cuts will invalidate this outlook.