- The Canadian dollar made some progress against Greenback on Friday.
- Canada Bank is preparing to provide another price reduction next week.
- The weakness in the US dollar index pays CAD higher than CAD itself.
The Canadian dollar (CAD) gained about one percent against Greenback on Friday, a higher but still firm testing style that began in mid -December. The US dollar is followed in all fields to end a largely unnoticed trading week, instead of LONIE finding any pressure of fundamental bids, which means that it is unlikely to continue the bullish momentum.
Canada Bank (BOC) is preparing to provide a reduction in the other quarter price next week, while the Federal Reserve (Fed) is expected to stand widely on interest rates during the first half of the year. With the expansion of the interest rate at the USD/CAD interest rate, foreign currency markets are unlikely to find a great reason for submit to LONIE bids after both central banks appear in the appearance of their calls, both of which are scheduled for next Wednesday.
Daily Digest Market Movers: CAD acquires a thin ground on the reality of risk morale
- CAD rose about a quarter of a percent against Greenback.
- LONIE’s gains from softening the demand for the market in US dollar comes instead of any fundamental power.
- BOC is expected to reduce interest rates by 25 basis points next week.
- The federal reserve is expected, after just hours, fixed.
- Little observation is on LONIE’s economic spreading next week.
Canadian dollar price expectations
The US dollar unification phase continues to grind sideways as LONIE traders struggle to pushing any of the two directions decisively. The price procedure remains restricted around the handle of 1.4400, although the CAD is frequently tested its fresh level.
The last ups of the husband’s last ups, as the Si -moving average increases for 50 days (EMA) to 1.4250, but the signs of artistic transformation remain absent. The bids remain in the short term bound by a technical floor at a price in the handle of 1.4300.
Daily Plan USD/CAD
Questions and answers in Canadian dollars
The main factors that pay the Canadian dollar (CAD) are the level of interest rates set by Canada Bank (BOC), the price of oil, the largest export in Canada, the health of its economy, inflation and commercial balance, which is the difference between the value of Canada’s exports in exchange for its imports. Other factors include market morale-if investors are eating more risky assets (risk) or searching for safe materials (risk)-with positive CAD risks. As its largest commercial partner, the health of the American economy is also a major factor that affects the Canadian dollar.
Canada Bank (BOC) has a major impact on the Canadian dollar by determining the level of interest rates that banks can persuade each other. This affects the level of interest rates for everyone. The main goal of BOC is to keep inflation by 1-3 % by setting interest rates up or down. Relatively higher interest rates tend to be positive for CAD. Canada Bank can also use quantitative dilution and tighten it to influence credit conditions, with previous CAD negative and the other positive CAD.
The price of oil is a major factor that affects the value of the Canadian dollar. Petroleum is the largest export in Canada, so the price of oil tends to an immediate effect on the CAD value. In general, if the price of oil rises, the CAD rises, with the increased total demand for the currency. The opposite is the case if the price of oil decreases. The high oil prices also tend to increase the possibility of a positive commercial balance, which also supports CAD.
While inflation was always believed to be a negative factor of the currency because it reduces the value of money, the opposite was already the case in the modern era with the relaxation of capitalist controls across the border. Top inflation tends to lead the central banks to raise interest rates that attract more capital flows from global investors looking for a profitable place to keep their money. This increases the demand for the local currency, which in the case of Canada is the Canadian dollar.
Victory of macroeconomic data evaluates the health of the economy and can have an impact on the Canadian dollar. Indicators such as GDP, manufacturing, PMIS, employment services, and consumer morale surveys can affect CAD direction. The strong economy is useful for the Canadian dollar. Not only attracts more foreign investments, but it may encourage Canada Bank to set interest rates, which leads to a stronger currency. If economic data is weak, CAD is likely to fall.