GBP/USD maintains its fresh bullish bias in the upper-1.2700s, printing marked gains in response to some loss of impulse in the US Dollar, which in turn lent fresh legs to the risk-associated universe on Tuesday.
USD/CAD Exchange rate
Editors’ Picks
EUR/USD clings to daily gains above 1.0900, eyes on tariffs
EUR/USD keeps the bid bias well in place so far on Tuesday, hovering above the 1.0900 barrier on the back of fresh downside pressure in the Greenback amid investors' hope of trade negotiations.
Gold trims gains and breaches $3,000
Gold prices now lose some upside momentum and slip back below the critical $3,000 mark per troy ounce. Tuesday's recovery in the yellow metal comes on the back of the weaker US Dollar as well as steady trade tensions, while higher US yields continue to cap gains.
Who is Satoshi? Crypto lawyer sues DHS to reveal Satoshi Nakamoto's identity
James Murphy, a cryptocurrency lawyer popularly known to his followers on X as "MetalLawMan," has filed a lawsuit in a D.C. District Court against the Department of Homeland Security (DHS). He intends to uncover the real face or faces behind Satoshi Nakamoto, the pseudonymous creator of Bitcoin.
The Fed is looking at a hefty price level
We are still in thrall to tariffs, the faux-macro “data” driving markets. The WSJ editorial board advised other countries to take their tariffs to zero so that Trump’s “reciprocal” tariffs will have to be zero, too. Cute, but no cigar.
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Signatures
USD/CAD, THE “LOONIE”
The USD/CAD tells the trader how many Canadian dollars (the quote currency) are needed to purchase one U.S. dollar (the base currency). This currency pair is known as the "Loonie", a nickname derived from the picture of a loon, a distinctive bird which appears on one side of Canada's gold-coloured, one Dollar coin.
THE IMPORTANCE OF OIL FOR THE LOONIE
The USD/CAD is one of the three so-called “commodity pairs”, together with AUD/USD, NZD/USD, highly correlated to commodity (especially oil) fluctuations.
Canada is commonly known as a resource-based economy being a large producer and supplier of oil. The leading export market for Canada is by far the United States making its currency particularly sensitive to US consumption data and economical health.
FORECAST FOR 2025
Political turmoil at both home and abroad will threaten the Canadian Dollar heading into 2025. Incoming US President-elect Donald Trump has invested significant time on social media, threatening widespread tariffs on all of the US’ closest trading partners, including Canada. USD/CAD closed higher every month in 2024 except for three, gaining ground during the other nine.
If the BoC continues to slash rates in an effort to bolster its lopsided economy, and the Fed begins to pull the brakes on rate cuts through the next year, the CAD’s rate differential could widen significantly, sending the Loonie even lower against the Greenback. Read more details about the forecast.
ASSETS THAT INFLUENCE USD/CAD THE MOST
- Commodities: oil but also gold and natural gas are to be taken into account.
- Currencies: JPY and EUR. This group also includes: EUR/USD, GBP/USD, USD/JPY, AUD/USD, USD/CHF, NZD/USD, GBP/JPY and EUR/JPY
- Bonds: CSB (Canada Savings Bonds), CPB (Canada Premium Bond).
- Indices: S&P/TSX Capped Composite Index (the headline index for the Canadian equity market), S&P/TSX Global Gold Index (index of global gold securities) and S&P/TSX Capped Energy Index (benchmarks for related derivative products of Canadian economic sectors).
ORGANIZATIONS, PEOPLE AND ECONOMIC DATA THAT INFLUENCE USD/CAD
In Canada, the organizations and people that affect the most the moves of the USD/CAD pair are:
- Bank of Canada (BoC, Canada’s Central bank) that promotes a safe and sound financial system within tyhe country, issuing statements and deciding on the interest rates of the country. Its president is Tiff Macklem.
- Canadian Government (headed by Justin Trudeau) and its Department of Finance that implement policies that affect the economy of the country.
- CAPP (Canadian Association of Petroleum Producers): Canada being a prominent oil and natural gas producer, the trade organization of that industry is very important.
In the USA, we have:
- The US Government (and its President Donald Trump): events as administration statements, new laws and regulations or fiscal policy can increase or decrease the value of the US Dollar and the currencies traded against it, in this case the Canadian Dollar.
- Fed, the Federal Reserve of the United States whose president is Jerome Powell. The Fed controls the monetary policy, through active duties such as managing interest rates, setting the reserve requirement, and acting as a lender of last resort to the banking sector during times of bank insolvency or financial crisis.
In terms of economic data, we should highlight the Trade Account Balance, a balance between exports and imports of total goods and services. A positive value shows trade surplus, while a negative value shows trade deficit. It is an event that generates some volatility for the USD/CAD. If a steady demand in exchange for CAD exports is seen, that would turn into a positive growth in the trade balance, and that should be positive for the CAD.
Inflation is another economic value that is important for the USD/CAD pair. It is measured among others by the CPI (Consumer Price Index) and the PPI (Production Price Index). They are key indicators to measure inflation and changes in purchasing trends.