- The Canadian dollar is moving within short-term ranges.
- On Thursday the Canadian agenda will be empty.
- Friday will close the week with Canadian Retail Sales and US University of Michigan Consumer Sentiment.
The Canadian Dollar (CAD) pivots around familiar levels on Thursday as broader market flows take the driver's seat in the second half of the trading week. The Canadian Dollar has risen for the week, but continues to decline against the US Dollar (USD) since Monday's opening bids.
Canada's November retail sales will be released on Friday, closely followed by the University of Michigan Consumer Sentiment Index.
Daily summary of market movements: The Canadian dollar trades in the middle of the Thursday session
- Markets continue to digest the updated rate cut prospects, as investors weigh the continued strength of the US economic outlook.
- US Initial Jobless Claims stood at 187,000 for the week ended January 12, below the forecast of 207,000 and below the previous week's 202,000 (revised downward from 203,000). .
- Revisions continue to affect US data, but jobless claims are seeing only minor adjustments for now.
- US housing starts also beat expectations, falling less than expected, and building permits rose above forecasts.
- U.S. housing starts added 1.46 million new units to the national housing supply, down from 1.525 million in the previous period (revised from 1.56 million), but a smaller drop from 1.4265 million planned.
- US building permits rose to 1.495 million in December, up from 1.467 million the previous month and above the forecast of 1.48 million.
- Markets remain choppy as investor bets for faster, deeper rate cuts by the Federal Reserve (Fed) run into the tough wall of a stronger-than-expected U.S. economy and uneven declines in inflation. inflation.
- Fed officials continue to warn of the need to move slowly as chances of a rate cut in March evaporate.
Current rate of the Canadian dollar
Below is the percentage change of the Canadian Dollar (CAD) against the currencies listed today. The Canadian dollar appreciated against the Swiss franc.
| USD | EUR | GBP | CAD | AUD | JPY | NZD | CHF | |
| USD | 0.29% | -0.01% | 0.02% | -0.15% | 0.02% | 0.09% | 0.45% | |
| EUR | -0.27% | -0.26% | -0.25% | -0.40% | -0.24% | -0.16% | 0.19% | |
| GBP | -0.04% | 0.26% | -0.01% | -0.17% | 0.00% | 0.06% | 0.42% | |
| CAD | -0.03% | 0.26% | -0.05% | -0.18% | -0.02% | 0.06% | 0.42% | |
| AUD | 0.13% | 0.41% | 0.11% | 0.14% | 0.15% | 0.21% | 0.58% | |
| JPY | -0.02% | 0.26% | 0.00% | 0.00% | -0.16% | 0.08% | 0.44% | |
| NZD | -0.08% | 0.17% | -0.09% | -0.08% | -0.24% | -0.09% | 0.34% | |
| CHF | -0.45% | -0.18% | -0.44% | -0.44% | -0.59% | -0.44% | -0.35% |
The heat map shows the percentage changes of the major currencies against each other. The base currency is chosen in the left column, while the quote currency is chosen in the top row. For example, if you choose the euro in the left column and scroll down the horizontal line to the Japanese yen, the percentage change in the box will represent EUR (base)/JPY (quote).
Technical Analysis: Canadian Dollar Avoids Further Losses, But US Dollar Remains Strong
The Canadian Dollar (CAD) is strengthened by the falls of the Euro (EUR) and the Swiss Franc (CHF), which rise by around 0.25% and 0.4%, respectively. The CAD remains relatively flat in the rest of the major currencies, at one-fifth of the US dollar, the British pound (GBP), the Australian dollar (AUD) and the Japanese yen (JPY).
The US dollar rose early on Thursday, dragging USD/CAD towards 1.3530 before markets rejected the momentum and retreated towards the middle zone, leaving the pair stuck in an intraday consolidation near 1.3500.
Following a 2.4% recovery from the December low near 1.3177, USD/CAD faces a congestion zone as the 50-day and 200-day SMA consolidate near 1.3500.
USD/CAD Hourly Chart
USD/CAD Daily Chart
Frequently Asked Questions about the Canadian Dollar
What factors determine the price of the Canadian dollar?
The key factors that determine the price of the Canadian dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of oil, Canada's main export product, the health of its economy, inflation and the trade balance, which is the difference between the value of Canadian exports and its imports. Other factors are market confidence, that is, whether investors bet on riskier assets (risk-on) or look for safe assets (risk-off), with the risk-on being positive for the CAD. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian dollar.
How do Bank of Canada decisions affect the Canadian dollar?
The Bank of Canada (BoC) exerts significant influence over the Canadian Dollar by setting the level of interest rates that banks can lend to each other. This influences the level of interest rates for everyone. The BoC's main objective is to keep inflation between 1% and 3% by adjusting interest rates up or down. Relatively high interest rates are usually positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former being negative for the CAD and the latter being positive for the CAD.
How does the price of oil affect the Canadian dollar?
The price of oil is a key factor influencing the value of the Canadian Dollar. Oil is Canada's largest export, so the price of oil tends to have an immediate impact on the value of the CAD. Generally, if the price of oil rises, the CAD also rises, as aggregate demand for the currency increases. The opposite occurs if the price of oil falls. Higher oil prices also tend to lead to a higher probability of a positive trade balance, which also supports the CAD.
How does inflation data influence the value of the Canadian Dollar?
Although inflation has traditionally always been considered a negative factor for a currency, as it reduces the value of money, the opposite has actually happened in modern times, with the relaxation of cross-border capital controls. Higher inflation often leads central banks to raise interest rates, attracting more capital inflows from global investors looking for a lucrative place to store their money. This increases the demand for the local currency, which in the case of Canada is the Canadian Dollar.
How does economic data influence the value of the Canadian dollar?
The published macroeconomic data measures the health of the economy and may have an impact on the Canadian dollar. Indicators such as GDP, manufacturing and services PMIs, employment and consumer confidence surveys can influence the direction of the CAD. A strong economy is good for the Canadian dollar. Not only does it attract more foreign investment, but it may encourage the Bank of Canada to raise interest rates, resulting in a stronger currency. However, if economic data is weak, the CAD is likely to fall.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
