USD/CAD Exchange rate


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Editors’ Picks

EUR/USD bullish prospects are fraying

The risk switch was turned off and on throughout the day, and the dollar traded alongside. The EUR/USD pair traded as high as 1.1754, and as low as 1.1684, now ending the day in the red in the 1.1710 price zone.

EUR/USD News

GBP/USD hits 1.29 on better market mood

GBP/USD is trading around 1.29, up from the lows. The safe-haven dollar is falling amid fresh hopes for a fiscal stimulus deal. Concerns about Brexit and the British coronavirus situation weighed on the pound earlier.

GBP/USD News

XAU/USD retreats after hitting one-week highs above $1900

The recovery in gold after last week sharp decline continues to be capped by the $1,900/oz area. Recently, boosted by a slide of the US dollar, XAU/USD rose to $1,902 reaching the highest level in a week, but it failed to hold above $1,900 and pulled back.

Gold News

Bitcoin could be poised for another $10,000 retest

Bitcoin is currently trading at $10,700 after a failed attempt to climb above $11,000. The digital asset has established a robust support level at $10,000, defended on several occasions throughout September.

Read more

WTI clinches daily highs near $39.50 ahead of EIA

Prices of the barrel of the American benchmark for the sweet light crude oil are partially fading Tuesday’s pullback and manage to regain the $39.50 region ahead of key supply data.

Oil News

Majors

Cryptocurrencies

Signatures


USD/CAD, THE “LOONIE”

The USD/CAD tells the trader how many Canadian dollars (the quote currency) are needed to purchase one U.S. dollar (the base currency). This currency pair is known as the "Loonie", a nickname derived from the picture of a loon, a distinctive bird which appears on one side of Canada's gold-coloured, one Dollar coin.


THE IMPORTANCE OF OIL FOR THE LOONIE

The USD/CAD is one of the three so-called “commodity pairs”, together with AUD/USD, NZD/USD, 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.


FORECAST FOR 2020

In our annual forecast, our surveyed contributors expect the USD/CAD to reach 1,3089 by the end of the year.

With the Fed on hold and projecting no change through the end of 2020 and the Canadian economy performing well, the BOC governors would need an extraordinary economic reason to re-open the interest rate discussion.

See full forecast


ASSETS THAT INFLUENCE USD/CAD THE MOST

  • Commodities: oil but also gold and natural gas are to be taken into account.
  • Currencies: JPY and EUR. This group also includes: EUR/USD, GBP/USD, USD/JPY, AUD/USD, USD/CHF, NZD/USD, GBP/JPY and EUR/JPY
  • 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).

ORGANIZATIONS, PEOPLE AND ECONOMIC DATA THAT INFLUENCE USD/CAD

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

  • Bank of Canada (BoC, Canada’s Central bank) that promotes a safe and sound financial system within tyhe country, issuing statements and deciding on the interest rates of the country. Its president is Tiff Macklem.
  • Canadian Government (headed by Justin Trudeau) 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 (and its President Donald Trump): 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 USD/CAD. 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 the USD/CAD pair. It is measured among others by the CPI (Consumer Price Index) and the PPI (Production Price Index). They are key indicators to measure inflation and changes in purchasing trends.