Created
: 2024.11.13
- 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 appreciates to near 1.3950 as traders adopt caution ahead of US CPI figures
World FX news
Breaking news
USD/CAD appreciates to near 1.3950 as traders adopt caution ahead of US CPI figures
New
2024.11.13 16:16
2024.11.13 16:16
2024.11.13 16:16
- USD/CAD strengthens as the US Dollar appreciates due to optimism surrounding the Trump trades.
- The implementation of US President-elect Donald Trump's proposed fiscal policies could delay further rate cuts by the Fed.
- The commodity-linked CAD weakens as Oil prices decline following OPEC's lowered forecast for global Oil demand growth in 2024.
USD/CAD moves upwards for the fourth successive session, trading around 1.3960 during the early European hours on Wednesday. The primary factor contributing to the recent weakness in EUR/USD is the strength of the US Dollar (USD) amid optimism surrounding the Trump trades.
The implementation of US President-elect Donald Trump's proposed fiscal policies could stimulate investment, increase government spending, and bolster labor demand. However, this surge in economic activity could also fuel inflation risks.
On Tuesday, Minneapolis Fed President Neel Kashkari affirmed that the central bank remains confident in its ongoing battle against transitory inflation but cautioned that it is still too early to declare full victory. Kashkari also noted that the Fed would refrain from modeling the economic impact of Trump's policies until there is greater clarity on the specifics of those policies.
The decline in crude Oil prices continues to weaken the commodity-linked Canadian Dollar (CAD). Notably, Canada remains the largest Oil exporter to the United States (US). As of this writing, West Texas Intermediate (WTI) Oil trades near $68.00. Crude Oil prices fell after the Organization of the Petroleum Exporting Countries (OPEC) reduced its forecast for global Oil demand growth in 2024.
With a quiet economic calendar in Canada this week, the Loonie Dollar is taking a backseat to the Greenback. Traders are now turning their attention to the upcoming US inflation data release on Wednesday, which could provide more insight into future US policy.
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
: 2024.11.13
Related articles
Crude Oil under pressure after monthly IEA report
2024.11.14 22:40WTI recovers to near $68.00, stronger US Dollar might cap its gains
2024.11.14 08:56Crude Oil trades stuck at $68 level ahead of API stockpile data
2024.11.13 20:23USD/CAD appreciates to near 1.3950 as traders adopt caution ahead of US CPI figures
2024.11.13 16:15WTI drops to near $68.00 as OPEC cuts demand view
2024.11.13 08:59US government buys oil for strategic reserves yet again - Commerzbank
2024.11.12 23:22
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
NZD/JPY Price Analysis: Pair stuck in range, moves sideways
The NZD/JPY pair declined mildly to 91.40 on Thursday's session and continued trading within the range of 92.00-91.00.
New
2024.11.15 06:34Gold price consolidates amid strong US Dollar, robust PPI data
Gold recovers some ground on Thursday yet remains trading below its opening price for the fifth consecutive day, undermined by the Greenback's advance for its own fifth consecutive day.
New
2024.11.15 05:36Australian Dollar declines on weak labor data, US Dollar hits yearly high
The AUD/USD declined by 0.34% to 0.6470 in Thursday's session, extending its decline to a fresh three-month low of 0.6460.
New
2024.11.15 05:00Forex Today: Attention is back to the real economy
The US Dollar continued its ascent, reaching fresh 2024 highs, even as the Trump-led rally showed signs of slowing and US yields dipped slightly ahead of a busy economic calendar on Friday.
New
2024.11.15 04:41Banxico lower rates by 25 basis points, signals further easing
The Bank of Mexico cut rates by 25 basis points for the fourth time since March 21, diminishing Mexico's primary reference rate from 10.50% to 10.25%.
New
2024.11.15 04:26Powell speech grabs attention in the American afternoon, focus on Trump
Federal Reserve (Fed) Chairman Jerome Powell is due to participate in a panel discussion titled "Global Perspectives" at an event hosted by the Federal Reserve Bank of Dallas this Thursday, and speculative interest eagerly awaits his words.
New
2024.11.15 03:30Dow Jones Industrial Average cools as post-election rally chills
The Dow Jones Industrial Average (DJIA) pumped the brakes on the recent post-election rally that saw a decisive win for presidential candidate and former President Donald Trump.
New
2024.11.15 03:23US Dollar softens after reaching yearly high on Dollar Index
The US Dollar Index (DXY), a measure of the value of the USD against a basket of six currencies, softened after hitting a fresh year-to-date high near 107.00.
New
2024.11.15 03:20Mexican Peso steadies ahead of Banxico's rate decision amid hot US inflation data
The Mexican Peso wavers against the US Dollar on Thursday after snapping three days of losses on Wednesday.
New
2024.11.15 02:34EUR/GBP Price Analysis: Bearish respite, indicators remain negative
The EUR/GBP pair rose to 0.8320 in Thursday's session. Despite a temporary respite for the bears after recent declines, technical indicators remain deeply negative, with the pair trading below the 20-day Simple Moving Average (SMA) which stands around 0.8340.
New
2024.11.15 00:52Disclaimer:
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
