USDCAD Forecast and News


USD/CAD corrects further from over a two-year high, downside potential seems limited

USD/CAD attracts some dip-buying near the 1.3630 region, though lacks follow-through. Positive oil prices underpin the loonie and act as a headwind amid overbought RSI (14). The set-up favours bullish traders and supports prospects for a further appreciating move.

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EUR/USD braces for fresh multi-year low around 0.9600, ECB’s Lagarde, Fed’s Powell eyed

EUR/USD braces for fresh multi-year low around 0.9600, ECB’s Lagarde, Fed’s Powell eyed

EUR/USD holds lower grounds around the yearly bottom marked on Monday, despite picking up bids to 0.9600 during Wednesday’s Asian session, as risk-aversion intensifies. Firmer US data, hawkish Fedspeak joined upbeat yields to weigh on prices.

EUR/USD News

GBP/USD: Inside candle favors a pullback, 1.1000 a key hurdle

GBP/USD: Inside candle favors a pullback, 1.1000 a key hurdle

The GBP/USD pair has turned sideways after a strong rebound from a fresh multi-decade low of 1.3565 on Monday. The cable is displaying back-and-forth moves in a range of 1.0661-1.0832 and is displaying a volatility contraction phase. 

GBP/USD News

USD/JPY: No man’s land hints at further consolidation

USD/JPY: No man’s land hints at further consolidation

The USD/JPY pair has slipped to near 144.27 in the Tokyo session after failing to sustain above the critical resistance of 144.50. The asset is continuously facing barricades above 144.50 despite multiple attempts. On a broader note, the asset is advancing sharply higher after hitting a low of 140.35.

USD/JPY News

Gold dribbles above $1,600 as inverted hammer contrasts risk-aversion

Gold dribbles above $1,600 as inverted hammer contrasts risk-aversion

Gold price struggles to find acceptance at around $1,630, despite bullish technical signals, as fears of the European energy crisis join firmer yields to propel the US dollar. Bullish candlestick can play its role if Fed’s Powell resists praising hawks.

Gold News

WTI licks its wounds near $77.00 as recession woes ebb, US macro, API inventories eyed

WTI licks its wounds near $77.00 as recession woes ebb, US macro, API inventories eyed

WTI crude oil portrays a corrective bounce amid Tuesday’s quiet Asian session, around $77.10 by the press time of the pre-European session. In addition to the lack of data/events during early Tuesday, the US dollar’s pullback and hopes of avoiding the recession seem to have favored the energy benchmark’s recovery from the lowest levels since January 2020.

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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 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.

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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).