Loonie loses ground on negative sentiment and falling crude prices

The loonie has fallen over 0.5% since Friday’s close and now looks vulnerable to fall even further with weakening fundamentals and fears of further decreasing interest rates on the March 4th decision. No new economic data has been released out of Canada this morning and focus remains on oil prices, policy decisions coming out next week and Governor Poloz speaking tomorrow.
Existing home sales stands alone as the sole data point released out of the US this morning. This came out a miss at 4.82M vs. the expectation of 5.02M but has done little to curb USD strength this morning. Fed chair Yellen testifies for two days beginning tomorrow and this with have implications on the growing USD strength.
EUR is down over 0.5% into the open this morning with Greek headline risk remaining to be the top story. German IFO was marginally lower than expected coming out at 106.8 against the expectation of 107.4. Greece now faces the difficult task of providing a list of reforms to its existing bailout agreement which will satisfy the financial institutions as well as try and stick to its promise of shifting from austerity and short-term funding pressures.
Oil has started to stabilize but still remains vulnerable to a fall in prices. It has fallen over 3% this morning but is still trading within its month range. The economic impact of $50 oil continues to be negative for the Canadian economy and a further fall in prices increases the chance of another rate cut which will push CAD even weaker.
Equities are down again across the board yet again this morning: the Dow down 0.28%, S&P down 0.22%, NASDAQ down 0.16% and the TSX down 0.23%. Crude Oil is down 3.23% this morning ($49.32) while Gold is up 0.24% ($1,207.80).