- The Canadian Dollar gained ground against the US Dollar, but fell elsewhere.
- Canada set to deliver the latest round of CPI inflation figures on Tuesday.
- Jackson Hole looms large later in the week.
The Canadian Dollar (CAD) broadly shed weight on Monday, declining across the board except for a firm performance against the US Dollar, rising one-third of one percent against the softening Greenback. Market flows into and out of the CAD remain subdued as investors buckle down for the long wait to the Jackson Hole Economic Symposium set to kick off later this week.
Canada’s latest inflation print is due on Tuesday, with headline Consumer Price Index (CPI) inflation forecast to tick lower in July, while core CPI is expected to accelerate in a price growth bump after contracting the previous month. The Bank of Canada’s (BoC) own core CPI inflation tracker last printed 1.9% YoY in June.
Daily digest market movers: Canadian CPI approaches as Fed watch continues to grind away
- Markets are broadly looking ahead to this week’s kick-off of the Jackson Hole Economic Symposium, where rate-cut-hungry investors will be hanging on every word from Federal Reserve (Fed) policymakers.
- Recent bets of a double cut in September have eased significantly after reaching a peak of 70% two weeks ago. According to the CME’s FedWatch Tool, rate markets are pricing in a scant one-in-five chance of a 50 bps cut on September 18.
- Overall, markets still have a 25 bps cut in September fully priced in, with three or four quarter-point cuts expected by the end of the year.
- Canadian Consumer Price Index (CPI) inflation forecast to tick down to 2.5% from 2.7% for the month of July
- Canadian Core CPI is expected to accelerate to 0.3% MoM from the previous month’s -0.1% contraction.
Canadian Dollar PRICE Today
The table below shows the percentage change of Canadian Dollar (CAD) against listed major currencies today. Canadian Dollar was the strongest against the US Dollar.
USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
---|---|---|---|---|---|---|---|---|
USD | -0.53% | -0.35% | -0.72% | -0.36% | -0.93% | -1.11% | -0.32% | |
EUR | 0.53% | 0.11% | -0.15% | 0.17% | -0.49% | -0.73% | 0.18% | |
GBP | 0.35% | -0.11% | -0.42% | 0.03% | -0.61% | -0.77% | 0.07% | |
JPY | 0.72% | 0.15% | 0.42% | 0.29% | -0.24% | -0.24% | 0.27% | |
CAD | 0.36% | -0.17% | -0.03% | -0.29% | -0.59% | -0.65% | 0.00% | |
AUD | 0.93% | 0.49% | 0.61% | 0.24% | 0.59% | -0.08% | 0.67% | |
NZD | 1.11% | 0.73% | 0.77% | 0.24% | 0.65% | 0.08% | 0.79% | |
CHF | 0.32% | -0.18% | -0.07% | -0.27% | -0.00% | -0.67% | -0.79% |
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 Canadian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent CAD (base)/USD (quote).
Canadian Dollar price forecast: USD/CAD crashes into 200-day EMA, set to run out of gas
The Canadian Dollar gained one-third of one percent against the Greenback on Monday, but broadly fell across the rest of the major currency board to kick off the new trading week. USD/CAD added further bearish fuel to the fire, extending a downside plunge below the 1.3700 handle.
Daily candlesticks are set to run aground of the 200-day Exponential Moving Average (EMA) near 1.3640, and CAD bidders are likely to run out of gas before price action can ease all the way down to 1.3600.
USD/CAD daily chart![](https://editorial.fxstreet.com/miscelaneous/USD_CAD-638596965717448182.png)
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.
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
AUD/USD advances to one-month top amid bearish USD
![AUD/USD advances to one-month top amid bearish USD](https://editorial.fxstreet.com/images/Markets/Currencies/Majors/AUDUSD/hundred-bucks-3645622_XtraSmall.jpg)
AUD/USD touches a one-month peak during the Asian session on Tuesday amid the divergent Fed-RBA policy outlook. Apart from this, the prevalent risk-on environment and the latest optimism over a possible economic stimulus from China's government act as a tailwind for the risk-sensitive Aussie.
EUR/USD climbs on risk-on sentiment swing, approaches 1.1100
![EUR/USD climbs on risk-on sentiment swing, approaches 1.1100](https://editorial.fxstreet.com/images/Markets/Currencies/Majors/EURUSD/world-currencies-53475296_XtraSmall.jpg)
EUR/USD rallied into a half-percent gain on Monday as investors kick off the new trading week with a fresh dog-pile into broad-market buy buttons. The Fiber was bolstered cleanly above 1.1050 and is headed firmly for a retest of the 1.1100 handle.
Gold stable above $2,500 and looking for fresh record highs
![Gold stable above $2,500 and looking for fresh record highs](https://editorial.fxstreet.com/images/Markets/Commodities/Metals/Gold/gold-bars-50657756_XtraSmall.jpg)
The persevering sell-off in the greenback, coupled with lower US yields and hopes of an interest rate cut by the Fed in September, all prompt Gold prices to dispute their record high past the $2,500 mark per ounce troy.
ADA slips out of top 10 cryptos, risk heavy correction as on-chain indicators turn bearish
![ADA slips out of top 10 cryptos, risk heavy correction as on-chain indicators turn bearish](https://editorial.fxstreet.com/images/Markets/Currencies/Cryptocurrencies/Coins/Cardano/Cardano_Coin_31_XtraSmall.jpg)
Cardano slipped out of the top 10 cryptocurrencies by market capitalization on Monday following a bearish signal across several of its on-chain metrics. ADA has largely underperformed in the current cycle compared to other altcoins.
International economic outlook
![International economic outlook](https://editorial.fxstreet.com/images/Macroeconomics/Countries/dotted-world-map-and-businessman-gm468917358-62044988_XtraSmall.jpg)
There have been no material forecast changes to the economic or inflation outlooks. This month, the forecast remains at 2.9% global GDP growth and 3.6% global CPI inflation for 2024. In the United States, a "soft landing" is still anticipated, although recession risks are acknowledged to be increasing.