Listen to the latest market mood for the CADJPY pair.
Oil is falling on coronavirus fears
Oil has continued to fall sharply again week on falling demand and oversupply issues that have come to the forefront in recent days. Asian equity markets were broadly lower overnight with the Nikkei down -0.74%, but the Shanghai Composite is seeing some mild recovery now at +0.41%. However, with earnings upon us this week there will be plenty of negative pressure for US stocks later in the session.
Expect CAD weakness today with oil prices remaining pressured. Canada has a large oil export market and the Canadian dollar’s fate is tied up with the price of oil. Therefore, with oil falling expect CAD weakness.
Expect JPY strength as long as equity markets remain pressured.
Therefore, expect CADJPY sellers on pullbacks.
We expect this outlook to play out over the next 2-3 day.
Risk to this outlook
The main risk to this outlook remains to be any positive coronavirus news which would send the market back into a risk on mood. Also, any positive news for oil would strength CAD and invalidate this outlook.