CAD bounce shortened
|Following January’s Bank of Canada’s (BoC) meeting, which decided to maintain its key rate at 1.75% for the second consecutive time, the loonie is holding up against the greenback. Under current settings, we expect the Canadian economy to stay robust and the BoC possibly to hike its rate by December 2019. USD/CAD’s drop from yesterday might be over, as optimism for resolution of the Sino-American trade dispute builds. However, risk of a US government shutdown by Saturday looms. Currently trading at 1.3225, USD/CAD is heading along 1.3255 short-term.
Canada’s GDP growth is now projected at 1.70% from a prior 2.10%. Inflation remains consistent, with December headline and core consumer prices at 2% and 2.30% (prior figures: 1.70%). The labour outlook remains highly constructive. Hourly earnings have taken off since a November 2018 downtrend, up 1.80% in January while the economy built 67,000 jobs in the same period. The recent bounce in oil prices from December is good for Canada’s trade balance. It benefits from OPEC’s price hike and Saudi Arabia’s output cut, but also from USA’s oil import sanction against Venezuela, as US refiners are willing to substitute it with Canadian heavy crude.
Stay on top of the markets with Swissquote’s News & Analysis
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.