Created
: 2024.11.06
- English
- English
- What's Myforex
- Share
- Use tools
- Get information
- What's New
- Help center
- About us
- Customer support
- Terms and policies
-
-
PortfolioShare your portfolio and performance in real time -
Events & contestsEvents and contests held by retail brokers around the world
-
-
Real-time spread comparisonCompare spreads of major retail brokers in real time -
Volatility analysisVisualize volatility as a measure of daily market activity -
Swap point comparisonCompare buy and sell swap values for each broker by symbol -
Market rates & chartsCheck prices for all instruments offered by each broker -
IndicatorsProviding in-house developed indicators for MT4/MT5 -
Trading calculatorsCalculation tools for each broker to help you trade
-
-
World FX newsLatest news on forex and cryptocurrencies from around the world -
Broker informationTrading information of retail brokers worldwide -
MetaTrader4/5 user guideUser guide collection for the latest MetaTrader4/5 -
Economic calendarRelease calendar for indicators from official sources of major economies
USD/CAD softens below 1.3850 as traders brace for US election results
World FX news
Breaking news
USD/CAD softens below 1.3850 as traders brace for US election results
New
2024.11.06 08:16
2024.11.06 08:16
2024.11.06 08:16
- USD/CAD edges lower to around 1.3825 in Wednesday's early Asian session.
- Election-related uncertainty weighs on the USD.
- Higher crude oil prices might support the Loonie for the time being.
The USD/CAD pair weakens to near 1.3825 during the early Asian session on Wednesday. The US Dollar (USD) remains under some selling pressure amidst heightened expectations ahead of the result of the US presidential election and the US Federal Reserve (Fed) meeting.
Polls show a tight race between Republican presidential candidate Donald Trump and Democratic candidate Kamala Harris. Election polls showed that Donald Trump has a lead over his opponent. Kalshi shows an overwhelming 57% to 43% Trump's advantage over Harris, while Polymarket puts the figures at 60.7% and 39.5%, respectively.
"Watching the dollar is going to be critical tonight. That will be the most liquid and the most transparent messaging to what we are getting markets to do because that's where people can put money to work fast," noted David Zervos, Jefferies chief market strategist.
Elsewhere, data released on Tuesday showed that the US ISM Services Purchasing Managers Index (PMI) rose to 56.0 in October from 54.9 in September, beating the estimation of 53.8. Meanwhile, S&P Global Services PMI came in at 55.0 in October, down from the previous reading and the consensus of 55.3.
The attention will shift to the Fed interest rate decision on Thursday, which is widely expected to cut interest rates by a quarter percentage point at the November meeting. Financial markets are now pricing in nearly a 94% possibility of a quarter point reduction and a near 80% odds of a similar-sized move in December, according to CME's FedWatch tool.
On the Loonie front, the rise in crude oil prices might underpin the commodity-linked Canadian Dollar (CAD) in the near term. Canada is the largest oil exporter to the United States (US), and higher crude oil prices tend to have a positive impact on the CAD value.
Canadian Dollar FAQs
The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada's largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada's exports versus its imports. Other factors include market sentiment - whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) - with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar.
The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive.
The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada's biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD.
While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada's case is the Canadian Dollar.
Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all 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 put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.
Last updated
: 2024.11.06
Related articles
Australian Dollar falls ahead of US election results, Georgia exit polls tilt toward Trump
3 minutes agoJapanese Yen slumps to 153.00 against USD after initial US election results
23 minutes agoNZD/USD attracts some sellers below 0.6000 as Trump trades climb
43 minutes agoBreaking: US Election 2024: Exit polls show a slim Trump's advantage
2024.11.06 09:14BoC Meeting minutes: Central bank feels upside pressure on inflation will continue to decline
2024.11.06 09:12BoJ Minutes: Central bank will continue rate hikes if economic and price forecasts meet
2024.11.06 09:03
FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.
Was this article helpful?
We hope you find this article useful. Any comments or suggestions will be greatly appreciated.
We are also looking for writers with extensive experience in forex and crypto to join us.
please contact us at [email protected].
Thank you for your feedback.
Thank you for your feedback.
Most viewed
Australian Dollar falls ahead of US election results, Georgia exit polls tilt toward Trump
The Australian Dollar (AUD) retraces its recent gains against the US Dollar (USD) on Wednesday as market anticipation builds ahead of the US presidential election outcome.
New
2024.11.06 10:29Japanese Yen slumps to 153.00 against USD after initial US election results
The Japanese Yen (JPY) touches a two-week high against its American counterpart during the Asian session on Wednesday after Bank of Japan (BoJ) minutes showed that the central bank will continue to hike interest rates if economic and price forecasts meet.
New
2024.11.06 10:09NZD/USD attracts some sellers below 0.6000 as Trump trades climb
The NZD/USD pair attracts some sellers to around 0.5970 on Wednesday during the early Asian session.
New
2024.11.06 09:49Breaking: US Election 2024: Exit polls show a slim Trump's advantage
A historical United States presidential election is about to come to an end.
New
2024.11.06 09:14BoC Meeting minutes: Central bank feels upside pressure on inflation will continue to decline
According to the Bank of Canada's (BoC) minutes from the October 2024 meeting that was released Wednesday, the governing council felt upside pressures on inflation will continue to decline, so the monetary policy did not need to be as restrictive.
New
2024.11.06 09:12BoJ Minutes: Central bank will continue rate hikes if economic and price forecasts meet
The Bank of Japan (BoJ) board members shared their views on the monetary policy outlook on Wednesday, per the BoJ Minutes of the September meeting.
New
2024.11.06 09:03USD/CAD softens below 1.3850 as traders brace for US election results
The USD/CAD pair weakens to near 1.3825 during the early Asian session on Wednesday.
New
2024.11.06 08:15EUR/USD rallies on Greenback weakness heading into US presidential election
EUR/USD benefited from a broad-market decline in the US Dollar as global markets brace for early polling outcomes from the US presidential election that kicked off on Tuesday.
New
2024.11.06 08:02New Zealand Unemployment Rate rises to 4.8% in Q3 versus 5.0% expected
The New Zealand Unemployment Rate in the third quarter (Q3) climbed to 4.8% from 4.6% in the second quarter, according to data published by Statistics New Zealand on Wednesday.
New
2024.11.06 07:49GBP/USD pushes back above 1.30 as the US heads into election territory
GBP/USD found the gas pedal on Tuesday, ramping up another two-thirds of a percent and clawing back above the 1.3000 handle as markets brace for what is likely to be a messy outcome from the US presidential election.
New
2024.11.06 07:49Disclaimer:
All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.
The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.
Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy
