Created
: 2025.01.03
- 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 holds losses around 1.4400, receives downward pressure from higher Oil prices
World FX news
Breaking news
USD/CAD holds losses around 1.4400, receives downward pressure from higher Oil prices
New
2025.01.03 16:26
2025.01.03 16:26
2025.01.03 16:26
- USD/CAD edges lower as the commodity-linked CAD receives support from improved Oil prices.
- WTI price extends its gains due to optimism surrounding the policy support to revive economic growth worldwide.
- The US Dollar Index reached a fresh multi-year high of 109.56 following the US Initial Jobless Claims on Thursday.
USD/CAD halts its three-day winning streak, trading around 1.4390 during the early European hours on Friday. The rise in crude Oil prices provides support to the commodity-linked Canadian Dollar (CAD), given Canada is the largest Oil exporter to the United States (US).
West Texas Intermediate (WTI) Oil price continues its winning streak for the sixth consecutive day, trading around $73.00 per barrel at the time of writing. WTI price reached two and a half-month high at $73.39 on Thursday. Crude Oil prices were buoyed by optimism that governments worldwide would ramp up policy support to revive economic growth, potentially boosting fuel demand.
However, factory activity in Asia, Europe, and the US ended 2024 on a weak note, as expectations for the new year dimmed due to growing trade risks associated with the incoming Donald Trump presidency and China's fragile economic recovery.
Data released by S&P Global on Thursday showed that Canada's Manufacturing PMI increased to 52.2 in December, up from 52.0 in November, marking its highest level since February 2023. This figure exceeded expectations, which had projected a reading of 51.9.
The US Dollar Index (DXY), which measures the US Dollar's (USD) performance against six major currencies, trades around 109.10 at the moment of writing. The DXY corrects slightly downwards after climbing to a fresh multi-year high of 109.56 following the Jobless Claims in the United States (US) release on Thursday.
The US Initial Jobless Claims for the week ending December 27 have come in lower than expected. Individuals claiming jobless benefits for the first time were 211K, lower than estimates of 222K and the former release of 220K.
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
: 2025.01.03
Related articles
Energy: Prices off to a strong start - ING
2025.01.06 18:34WTI hovers near $73.50, upside seems possible due to a potential increase in Oil demand
2025.01.06 13:32USD/CAD falls to near 1.4400 as receives downward pressure from improved Oil prices
2025.01.06 12:08USD/CAD holds losses around 1.4400, receives downward pressure from higher Oil prices
2025.01.03 16:25WTI rises to near $73.00 due to a potential policy support to revive economic growth
2025.01.03 13:46WTI holds positive ground above $71.50 as API reports draw in crude inventories
2025.01.02 15:53
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
EUR/USD Price Forecast: Climbs but struggles at 1.0400
The EUR/USD increased over 0.78%, boosted by an article in The Washington Post mentioning three US President-elect Trump aides and saying that tariffs will be applied, focusing on specific sectors.
New
2025.01.07 05:07Gold stagnates amid rising US yields and US Dollar downturn
Gold prices remained flat at the beginning of the week even though the Greenback is getting battered.
New
2025.01.07 05:00Forex Today: Greenback takes a step back on Monday
The US Dollar eased on Monday, giving other currencies a chance to recover some much-needed ground as markets gear up for another US NFP jobs print due at the end of the week.
New
2025.01.07 04:43Fed's Barr to resign early to avert a potential "dispute" over his post
Federal Reserve (Fed) Board Member and Vice Chair for Supervision will be stepping down from his regulatory role.
New
2025.01.07 04:32Canadian Dollar rebounds despite PM Trudeau resignation
The Canadian Dollar (CAD) caught some wind in its sales on Monday, lifted from recent lows by a market-wide easing in US Dollar flows.
New
2025.01.07 04:21Dow Jones Industrial Average lurches higher as investors brush off PMI miss
The Dow Jones Industrial Average (DJIA) extended into the bullish side to kick off the new trading week, clipping back over the 43,000 handle and lurching 300 points higher after a Washington Post article suggested that incoming President Donald Trump and his team may be considering a more nuanced approach to widespread tariffs the President-elect has threatened to impose shortly after taking office.
New
2025.01.07 02:45Mexican Peso rallies, unfazed by Trump tariff comments
The Mexican Peso begins the week positively, appreciating against the US Dollar on Monday after The Washington Post reported that Trump aides are only considering tariffs on "certain sectors", a less harsh policy than floated earlier.
New
2025.01.07 02:41EE.UU.: El PMI de servicios mejora a 56.8 en diciembre pero no alcanza los 58.5 puntos esperados
El PMI de servicios de S&P Global para Estados Unidos ha subido a 56.8 puntos desde los 56.1 de noviembre, su nivel más alto desde marzo de 2022.
New
2025.01.07 00:33GBP/USD swings amid US tariff speculation, Trump comments
The Pound Sterling begins the week on the front foot against the US Dollar after news emerged that US President-elect Trump's aides are considering tariffs on "certain sectors," according to the Washington Post.
New
2025.01.06 23:56US President-elect Trump: Washington Post story that I'll pare back my tariff policy is wrong
In response to the Washington Post story that said US President-elect Donald Trump's aides are considering tariffs that would be applied to every country but only cover critical imports, Trump said it was wrong.
New
2025.01.06 23:30Disclaimer:
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
