USD/CAD Exchange rate
Editors’ Picks
AUD/USD rises to two-day high ahead of Aussie CPI
The Aussie Dollar recorded back-to-back positive days against the US Dollar and climbed more than 0.59% on Tuesday, as the US April S&P PMIs were weaker than expected. That spurred speculations that the Federal Reserve could put rate cuts back on the table. The AUD/USD trades at 0.6488 as Wednesday’s Asian session begins.
EUR/USD holds above 1.0700 on weaker US Dollar, upbeat Eurozone PMI
EUR/USD holds above the 1.0700 psychological barrier during the early Asian session on Wednesday. The weaker-than-expected US PMI data for April drags the Greenback lower and creates a tailwind for the pair.
Gold price cautious despite weaker US Dollar and falling US yields
Gold retreats modestly after failing to sustain gains despite fall in US Treasury yields, weaker US Dollar. XAU/USD struggles to capitalize following release of weaker-than-expected S&P Global PMIs, fueling speculation about potential Fed rate cuts.
Ethereum ETF issuers not giving up fight, expert says as Grayscale files S3 prospectus
Ethereum exchange-traded funds theme gained steam after the landmark approval of multiple BTC ETFs in January. However, the campaign for approval of this investment alternative continues, with evidence of ongoing back and forth between prospective issuers and the US SEC.
Australia CPI Preview: Inflation set to remain above target as hopes of early interest-rate cuts fade
An Australian inflation update takes the spotlight this week ahead of critical United States macroeconomic data. The Australian Bureau of Statistics will release two different inflation gauges on Wednesday.
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Signatures
USD/CAD, THE “LOONIE”
The USD/CAD tells the trader how many Canadian dollars (the quote currency) are needed to purchase one U.S. dollar (the base currency). This currency pair is known as the "Loonie", a nickname derived from the picture of a loon, a distinctive bird which appears on one side of Canada's gold-coloured, one Dollar coin.
THE IMPORTANCE OF OIL FOR THE LOONIE
The USD/CAD is one of the three so-called “commodity pairs”, together with AUD/USD, NZD/USD, highly correlated to commodity (especially oil) fluctuations.
Canada is commonly known as a resource-based economy being a large producer and supplier of oil. The leading export market for Canada is by far the United States making its currency particularly sensitive to US consumption data and economical health.
FORECAST FOR 2024
The USD/CAD will see diverging central bank policy as a key driver through 2024, and the correlation between the Canadian Dollar and Crude Oil is likely to hold firm through the upcoming trading year. Despite musings in recent years about a shakeout in the Loonie-Crude connection, 2023 saw USD/CAD and West Texas Intermediate (WTI) US Crude Oil moving around the charts in lockstep.
The Canadian economy is expected to run into headwinds through the second half of 2024, coinciding with a global growth slowdown that could hamper Crude Oil prices next year as fossil fuels demand flounders in low-growth or recessionary environments.
ASSETS THAT INFLUENCE USD/CAD THE MOST
- Commodities: oil but also gold and natural gas are to be taken into account.
- Currencies: JPY and EUR. This group also includes: EUR/USD, GBP/USD, USD/JPY, AUD/USD, USD/CHF, NZD/USD, GBP/JPY and EUR/JPY
- Bonds: CSB (Canada Savings Bonds), CPB (Canada Premium Bond).
- Indices: S&P/TSX Capped Composite Index (the headline index for the Canadian equity market), S&P/TSX Global Gold Index (index of global gold securities) and S&P/TSX Capped Energy Index (benchmarks for related derivative products of Canadian economic sectors).
ORGANIZATIONS, PEOPLE AND ECONOMIC DATA THAT INFLUENCE USD/CAD
In Canada, the organizations and people that affect the most the moves of the USD/CAD pair are:
- Bank of Canada (BoC, Canada’s Central bank) that promotes a safe and sound financial system within tyhe country, issuing statements and deciding on the interest rates of the country. Its president is Tiff Macklem.
- Canadian Government (headed by Justin Trudeau) and its Department of Finance that implement policies that affect the economy of the country.
- CAPP (Canadian Association of Petroleum Producers): Canada being a prominent oil and natural gas producer, the trade organization of that industry is very important.
In the USA, we have:
- The US Government (and its President Joe Biden): events as administration statements, new laws and regulations or fiscal policy can increase or decrease the value of the US Dollar and the currencies traded against it, in this case the Canadian Dollar.
- Fed, the Federal Reserve of the United States whose president is Jerome Powell. The Fed controls the monetary policy, through active duties such as managing interest rates, setting the reserve requirement, and acting as a lender of last resort to the banking sector during times of bank insolvency or financial crisis.
In terms of economic data, we should highlight the Trade Account Balance, a balance between exports and imports of total goods and services. A positive value shows trade surplus, while a negative value shows trade deficit. It is an event that generates some volatility for the USD/CAD. If a steady demand in exchange for CAD exports is seen, that would turn into a positive growth in the trade balance, and that should be positive for the CAD.
Inflation is another economic value that is important for the USD/CAD pair. It is measured among others by the CPI (Consumer Price Index) and the PPI (Production Price Index). They are key indicators to measure inflation and changes in purchasing trends.