- The Canadian Dollar gives up further ground to the Greenback.
- Canada Retail Sales ease from previous figures but less than expected.
- Next week: Canada & US GDP figures to drive USD/CAD.
The Canadian Dollar (CAD) shed further weight against the US Dollar (USD) on Friday as market participants readjust their Greenback exposure in quiet Friday trading. Investors have pared back nearly all of the gains made during the midweek splurge sparked by rate cut bet hopes after the Federal Reserve (Fed) nodded toward higher odds of rate cuts to come.
Canada revealed a slight slide in Retail Sales figures in January. Fed Chairman Jerome Powell made few waves during his first public appearance since Wednesday’s Federal Open Market Committee (FOMC) press conference. Next week, Gross Domestic Product (GDP) figures from Canada and the US are expected but not until Thursday.
Canadian economic calendar events remain thin on the data docket until then, and next week will close out with another print of the Fed’s preferred inflation gauge, the Personal Consumption Expenditure (PCE) Price Index on Friday.
Daily digest market movers: CAD slips further as Greenback extends
- The Canadian Dollar is down around half of a percent against the US Dollar on Friday.
- Canadian MoM Retail Sales in January declined, but less than expected, printing at -0.3% versus the forecast of -0.4%. Canadian Retail Sales in December grew 0.9%.
- MoM Core Retail Sales, or Retail Sales excluding Automobiles, grew 0.5%, keeping well above the forecast of -0.4% but cooling slightly from the previous month’s 0.6%.
- Fed Chair Powell spoke at a Fed Listens event in Washington, DC. Markets monitored the speech for any qualifications or adjustments to the Fed head’s stance compared to Wednesday’s rate call, but Powell avoided discussing monetary policy.
- Next week:
- Canadian GDP is expected to tick upwards to 0.4% from 0.0%.
- US GDP is expected to stand pat at 3.2% in Q4.
- US (PCE) Price Index is expected to tick down to 0.3% from 0.4% MoM.
US Dollar price today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the weakest against the Japanese Yen.
| USD | EUR | GBP | CAD | AUD | JPY | NZD | CHF | |
| USD | 0.50% | 0.48% | 0.54% | 0.82% | -0.17% | 0.85% | 0.12% | |
| EUR | -0.50% | -0.02% | 0.06% | 0.32% | -0.67% | 0.35% | -0.37% | |
| GBP | -0.48% | 0.02% | 0.08% | 0.34% | -0.65% | 0.38% | -0.36% | |
| CAD | -0.56% | -0.06% | -0.07% | 0.28% | -0.73% | 0.29% | -0.43% | |
| AUD | -0.81% | -0.32% | -0.35% | -0.28% | -0.99% | 0.03% | -0.70% | |
| JPY | 0.17% | 0.66% | 0.65% | 0.72% | 0.98% | 1.03% | 0.29% | |
| NZD | -0.86% | -0.36% | -0.39% | -0.29% | -0.02% | -1.02% | -0.73% | |
| CHF | -0.10% | 0.39% | 0.38% | 0.45% | 0.71% | -0.27% | 0.74% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).
Technical analysis: Canadian Dollar gives up against Greenback, slumps back to familiar lows
The Canadian Dollar (CAD) fell into recent lows against the US Dollar on Friday, extending Thursday’s decline as the broader market scooped the safe-haven Greenback up once more after Wednesday’s overly enthusiastic plunge. The USD/CAD pair is back into the 1.3600 region and challenging the week’s technical highs.
USD/CAD is running up against a supply zone between 1.3600 and 1.3620, and the pair has completely pared away the Greenback’s midweek plunge, climbing nearly 1.2% bottom-to-top from Thursday’s early bottom bids of 1.3451. Despite consolidation, USD/CAD is on pace to set fresh highs for 2024 north of 1.3613, the fresh high set early this week.
USD/CAD continues to churn close to the 200-day Simple Moving Average (SMA) near 1.3488, and bidders will be looking to price in a technical floor from the 1.3500 handle. On the downside, the last swing low into 1.3450 will be the level to beat for short sellers looking to force the Greenback lower once more.
USD/CAD hourly chart
USD/CAD daily chart
Risk sentiment FAQs
In the world of financial jargon the two widely used terms “risk-on” and “risk off'' refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.
Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.
The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.
The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD holds on to intraday gains after upbeat US data
EUR/USD remains in positive ground on Friday, as profit-taking hit the US Dollar ahead of the weekend. Still, Powell's hawkish shift and upbeat United States data keeps the Greenback on the bullish path.
GBP/USD pressured near weekly lows
GBP/USD failed to retain UK data-inspired gains and trades near its weekly low of 1.2629 heading into the weekend. The US Dollar resumes its advance after correcting extreme overbought conditions against major rivals.
Gold stabilizes after bouncing off 100-day moving average
Gold trades little changed on Friday, holding steady in the $2,560s after making a slight recovery from the two-month lows reached on the previous day. A stronger US Dollar continues to put pressure on Gold since it is mainly priced and traded in the US currency.
Bitcoin to 100k or pullback to 78k?
Bitcoin and Ethereum showed a modest recovery on Friday following Thursday's downturn, yet momentum indicators suggest continuing the decline as signs of bull exhaustion emerge. Ripple is approaching a key resistance level, with a potential rejection likely leading to a decline ahead.
Week ahead: Preliminary November PMIs to catch the market’s attention
With the dust from the US elections slowly settling down, the week is about to reach its end and we have a look at what next week’s calendar has in store for the markets. On the monetary front, a number of policymakers from various central banks are scheduled to speak.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.