USDCAD Forecast and News


USD/CAD slumps to 1.2500 as USD selloff intensifies

The USD/CAD pair rose to a daily high of 1.2576 during the European trading hours but reversed its direction in the second half of the day. 

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SPECIAL WEEKLY FORECAST

Interested in weekly USDCAD forecasts? Our experts make weekly updates forecasting the next possible moves of the Canadian dollar-US dollar pair. Here you can find the most recent forecast by our market experts:

USD/CAD Weekly Forecast: A precarious balance of forces

The Canadian economy had a rousing employment report in March with more than three times as many jobs created as had been forecast. Yet with rising virus cases in several provinces, a new lockdown in Ontario, meandering oil prices and resilient US treasury rates, the USD/CAD could not break new ground.

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EUR/USD retains gains near the 1.2000 threshold

The EUR/USD pair advanced for a third consecutive day, holding near a daily high at 1.1986. Dollar bears leading the way higher ahead of US Retail Sales, employment data.

EUR/USD News

GBP/USD holds on to daily highs near 1.3800

The broad dollar’s weakness helps GBP/USD recover some ground, although the pound is among the worst performers. Britain's successful vaccination campaign supports sterling.

GBP/USD News

USD/JPY extends sideways grind around 109.00

After closing the first two trading days of the week in the negative territory, the USD/JPY pair turned quiet and continues to fluctuate in a relatively tight range on Wednesday.

USD/JPY News

Gold stays depressed below $1,750 amid mixed sentiment

Gold holds lower grounds after the previous day’s downbeat performance. The yellow metal dropped for three days in the last four even as the DXY remains dismal around a one-month low. US dollar weakness tests the bears amid dull markets.

Gold News

WTI pops to 2-week highs around $61.50 ahead of EIA

Prices of the barrel of the West Texas Intermediate advance to new 2-week highs beyond the $61.00 mark on Wednesday.

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USDCAD YEARLY FORECAST

How could USDCAD move this year? Our experts make a USDCAD update forecasting the possible moves of the Canadian dollar-US dollar pair during the whole year. Don't miss our 2021 USDCAD forecast!

USDCAD FORECAST 2021

In the USDCAD Forecast Price 2021, our dedicated contributors expect a bearish trend during the year. By the end of the year 2021, the average outlook for the pair is 1.2392. Read more details about the forecast.

From Jan 2020 to Dec 2020, the maximum level for the USDCAD (Canadian dollar US dollar) was 1.4513 (on 19/03/20), and the minimum, 1.2708 (on 15/12/20).

2021 OUTLOOK FOR USDCAD

The recurrence of the pandemic and re-instituted defensive measures in many countries will continue to cripple most economies through the first quarter and with diminishing severity into the second, delaying recovery even as the vaccines hopefully ensure it. Western Europe and the US can probably expect a drop in growth in the first quarter as the renewed closures hamstring economic activity. But once the recovery is underway Canada's large resource and oil-export industries will profit as commodity and oil prices continue higher returning to historical norms for a global expansion.


ORGANIZATIONS, PEOPLE AND ECONOMIC DATA THAT INFLUENCE USDCAD

In Canada, the organizations and people that affect the most the moves of the pair are:

  • Bank of Canada (BoC, Canada’s Central bank) that issues statements and decides on the interest rates of the country. Its president is Tiff Macklem.
  • Canadian Government 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: 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 USDCAD. 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 this pair. It is measured among others by the CPI (Core Price Index) and the PPI (Production Price Index). They are key indicators to measure inflation and changes in purchasing trends.


Jerome Powell

Jerome Powell took office as chairman of the Board of Governors of the Federal Reserve System in February 2018, for a four-year term ending in February 2022. His term as a member of the Board of Governors will expire January 31, 2028. Born in Washington D.C., he received a bachelor’s degree in politics from Princeton University in 1975 and earned a law degree from Georgetown University in 1979. Powell served as an assistant secretary and as undersecretary of the Treasury under President George H.W. Bush. He also worked as a lawyer and investment banker in New York City. From 1997 through 2005, Powell was a partner at The Carlyle Group.

Tiff Macklem

Tiff Macklem was born in Montréal, Quebec, in 1961. He was appointed Governor of the Bank of Canada, effective 3 June 2020, for a seven-year term. He is the tenth governor of the Bank of Canada. As Governor, he is also Chairman of the Board of Directors of the Bank for International Settlements (BIS). He currently chairs both, the BIS Audit Committee and the Consultative Council for the Americas.

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About USDCAD

THE 'LOONIE'

The USDCAD pair tells the trader how many Canadian dollars (the quote currency) are needed to purchase one U.S. dollar (the base currency). The 'Loonie' is a gold-coloured coin that was introduced in 1987 and is produced by the Royal Canadian Mint at its facility in Winnipeg.
The most prevalent versions of the coin show a common loon, a bird found throughout Canada, on the reverse and Queen Elizabeth II, the nation's head of state, on the obverse

THE IMPORTANCE OF OIL FOR THE LOONIE

The USDCAD is one of the three so-called “commodity pairs”, together with the following ones: AUD/USD, NZD/USD. These pairs are 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.
Gonçalo Moreira explains the correlations that exist between oil, the USD and the CAD: "If Canada is one of the world's largest producers of oil and oil is such a big part of the US economy, rising oil prices tend to have a negative effect on the USD and a positive effect on the CAD. Here you have two nice correlations.” Then he continues his analysis: “If you are willing to find a pair which is really sensitive to oil prices, then pick the CAD/JPY. Canada and Japan are at the extreme ends of production and consumption of oil. While Canada benefits from higher oil prices, Japan's economy can suffer because it imports nearly all of the oil it consumes. This is another interesting correlation to follow."

ASSETS THAT INFLUENCE USD/CAD THE MOST

  • Commodities: as we already explained, oil is number one, but gold and natural gas are also to be taken into account by the traders.
  • Currencies: JPY and EUR. Other important group of influent pairs includes: EUR/USD, GBP/USD, USD/JPY, AUD/USD, USD/CHF, an NZD/USD.
  • 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).