USDCAD Forecast and News


USD/CAD dips back from session highs in 1.2660s to flat with traders reluctant to sell loonie pre-BoC

USD/CAD has dropped back from earlier session highs in the 1.2660s to the 1.2640 area, to put it back to trading with Asia Pacific 1.2620-1.2650ish trading ranges. The loonie and other risk-sensitive currencies remain highly sensitive to US equity market volatility. 

Latest CAD News


Technical Overview


Fundamental Overview



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: Oil underlies Canadian strength Premium

WTI gains 6.5%, $83.66 highest close since October 2. USD/CAD drops to a two-month low on Thursday. Weak US Retail Sales do not deter Friday recovery in USD/CAD. US advantage in Treasury spreads narrows to 2 basis points. FXStreet Forecast Poll sees near-term technical weakness.

Read full analysis

Big Picture

USDCAD Bullish Themes

USDCAD Bearish Themes

Sponsor broker


FXS Signals

Latest CAD Analysis


Latest CAD Analysis

Editors' picks

EUR/USD struggles to pull away from multi-week lows, holds near 1.1270

EUR/USD stays deep in the negative territory near 1.1270 during the American trading hours on Tuesday as the greenback continues to outperform its rivals. The data from the US showed that the CB Consumer Confidence Index declined to 113.8 in January from 115.2 in December. 

EUR/USD News

GBP/USD consolidates daily losses near mid-1.3400s

GBP/USD fell to its weakest level in three weeks below 1.3450 on Tuesday and seems to be having a difficult time staging a convincing rebound. Safe-haven flows continue to dominate the financial markets following the mixed data releases from the US.

GBP/USD News

USD/JPY clings to modest intraday gains near two-day high, just above 114.00 mark

USD/JPY moved into the positive territory for the second successive day on Tuesday. Rebounding US bond yields underpinned the USD and extended support to the pair. A positive tone around the European equity markets weighed on the safe-haven JPY.

USD/JPY News

Gold hits levels above $1850 for the first time in two months and retreats

A quick drop in US yields boosted XAU/USD that jumped from $1840 to $1853, reaching the highest level since November 19. It then pulled back all the way to $1840 and now is approaching the $1850 area again.

Gold News

WTI prices sag to mid-$83.00s in tandem with US equity market downside after Monday’s wild swings

It was a choppy start to the week for global oil markets, with front-month WTI futures swinging within an $82.00-$86.00 range as energy markets were buffeted by extreme volatility in US equity markets. With US equity futures pointing lower heading into the Tuesday, oil prices are also sagging, with WTI down just under 50 cents and trading in the mid-$83.00s, now a good $4.0 below the multi-year highs printed last Wednesday above $87.50.

Oil News

Majors

Cryptocurrencies

Signatures


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 2022 USDCAD forecast!

USDCAD FORECAST 2022

In the USDCAD Forecast Price 2022, our dedicated contributors expect a bearish trend during the year. By the end of the year 2022, the average outlook for the pair is 1.2393. Read more details about the forecast.

From Jan 2021 to Dec 2021, the maximum level for the USDCAD (Canadian dollar US dollar) was 1.2942 (on 20/12/21), and the minimum, 1.2034 (on 06/02/21).

2022 OUTLOOK FOR USDCAD

Of the three main fundamental factors for the USD/CAD in 2022, the comparative Canadian and US economies, central bank interest rates and the price of oil, the first is a wash, the second tilts to the US and the third is unlikely to rise sufficiently to give the loonie a long-term advantage. The US and Canadian economies are likely to grow at similar rates next year. Central bank rate speculation depends on the course of inflation. If the American inflation reports leading to the March FOMC meeting show high or accelerating price increases, a March fed funds hike will rise to a near certainty.


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.

BOC NEWS & ANALYSIS

FED NEWS & ANALYSIS


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).