Expect USD/CAD sellers

The CAD has been strongly supported over the last 24 hours after a bullish shift from the Bank of Canada. The CAD rose by its most since June 2020 against the USD. The Bank of Canada is now the first central bank to exit its stimulus program after it announced that asset purchases would be reduced from $4 billion a week down to $3billion a week. On top of this, the BoC brought forward its guidance expecting an interest rate rise in 2022 vs expectation of rate rise in 2023.

The USD is weak at the moment as the US 10 year yields have failed to rise despite a good run of recent US data including a stronger than expected US CPI print, US retail sales, NFP data, PMI manufacturing and services data. Many analysts and investors still see the medium-term outlook for the USD as bearish.

In these conditions expect USDCAD sellers on rallies.

Key trade risks

  • Any further rise in Canadian COVID-19 cases will put a strain on this bullish outlook.

  • Any sharp falls in the oil markets on rising COVID-19 cases will weaken CAD.

  • If the FOMC meets next week and announce bond tapering, that will support the USD.


Learn more about HYCM

High Risk Investment Warning: Contracts for Difference (‘CFDs’) are complex financial products that are traded on margin. Trading CFDs carries a high degree of risk. It is possible to lose all your capital. These products may not be suitable for everyone and you should ensure that you understand the risks involved. Seek independent expert advice if necessary and speculate only with funds that you can afford to lose. Please think carefully whether such trading suits you, taking into consideration all the relevant circumstances as well as your personal resources. We do not recommend clients posting their entire account balance to meet margin requirements. Clients can minimise their level of exposure by requesting a change in leverage limit. For more information please refer to HYCM’s Risk Disclosure.

Feed news

Latest Forex Analysis


Latest Forex Analysis

Editors’ Picks

EUR/USD skyrockets to 1.2150 on poor US jobs figures

EUR/USD has hit a new multi-month peak above 1.2150 after the US reported an increase of only 266,000 jobs in April against nearly one million expected. The dollar is under immense pressure. 

EUR/USD News

GBP/USD soars toward 1.40 after disappointing Nonfarm Payrolls

GBP/USD has been extending its gains after the US Nonfarm Payrolls badly disappointed with an increase of only 266,000 jobs in April, nearing 1.40. Earlier, sterling benefited from the UK Conservative Party's gains in local elections. 

GBP/USD News

XAU/USD soars above $1,835 after weak Nonfarm Payrolls

Gold has leaped above $1,835 after the US reported an increase of only 266K jobs in April, far below expectations. Lower US yields support the precious metal.

Gold News

Judge reaffirms order SEC must produce documents on Bitcoin, Ether and XRP in Ripple case

Ripple's victory granted the firm access to the SEC's documents on the three leading cryptocurrencies. The regulatory agency recently denied the possession of these documents.

More Dogecoin News

S&P 500 and Nasdaq: Can the Fed pump anymore after weak jobs report

Well, that was an interesting jobs report. Not too many people were forecasting that one. Just in case you missed it NFP were forecast to come in around the 1 million jobs gained but instead the US only added 266k.

Read more

Majors

Cryptocurrencies

Signatures