USD/CAD Nears 1-Month Low Despite Pressure on Loonie From Oil Retreat

USD/CAD fell 0.44% to C$1.3893, the lowest since March 16.

The latest plunge comes even as major oil producers agreed to cut production by about 10 million barrels per day to offset the impact on demand from the Covid-19 pandemic. But many have raised concerns the cuts will not do enough to offset the 20 million bpd loss from the virus outbreak.

"CAD softness reflects the market’s dissatisfaction with the 'historic' oil production cuts agreed by OPEC+ last week and its lack of impact on WTI," Scotiabank said in a note.

"The cuts are inadequate in relation to the magnitude of the demand shock posed by Covid-19 that the analyst consensus has pegged at around double the headline 9.7 million bpd sticker amount of the cuts," the bank added.

The loonie will remain in focus this week ahead of widely expected stimulus from the Bank of Canada on Wednesday,

The BoC launched a bond-buying program on March 27, to buy the upcoming raft of Canadian government bonds as the country looks to finance stimulus measures to combat the pandemic.

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