USD/CAD Forecast Poll

The FXStreet Forecast Poll about USD/CAD (US Dollar vs Canadian Dollar) is a sentiment tool that highlights our selected experts' near and medium term mood and calculates trends according to Friday's 15:00 GMT price.

How to Read the Forecast Poll charts

OVERVIEW

This chart informs about the average forecast prices, and also how close (or far apart) sit the numbers from all participants surveyed that week. The bigger a bubble on the chart means more participants targeting a certain price level in that particular time horizon. This distribution also tells if there is unanimity (or disparity) among participants.

Bias

Each participant's bias is calculated automatically based on the week's close price and recent volatility. Drawing from those results, this chart calculates the distribution of bullish, bearish, and sideways forecast prices from all participants, informing about sentiment extremes, as well levels of indecision reflected in the number of “sideways”.

Averages

By displaying three central tendency measures (mean, median, and mode), you can know if the average forecast is being skewed by any outlier among the poll participants.

shifted price

In this chart, the close price is shifted behind so it corresponds to the date when the price for that week was forecasted. This enables the comparison between the average forecast price and the effective close price.

price change

This chart tracks the percentage change between the close prices. Bouts of volatility (or extreme flat volatility) can be then compared to the typical outcome expressed through the averages.

smooth average

This measure is basically an arithmetical average of the three central tendency measures (mean, median, and mode). It smooths the typical outcome eliminating any possible noise caused by outliers.

min/max

Together with the close price, this chart displays the minimum and maximum forecast prices collected among individual participants. The result is a price corridor, usually enveloping the weekly close price from above and below, and serves as a measure of volatility.

USD/CAD, THE “LOONIE”

The USD/CAD pair 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 also known as the "Loonie", a nickname derived from the picture of a loon, a distinctive bird which appears on one side of the Canada's gold-colored, one Dollar coin.

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:

  • The Bank of Canada that issues statements and decides on the interest rates of the country.
  • Canadian Government and its Department of Finance that implement policies that affect the economy of the country.

In the USA, we have:

  • The US Government: events as administration statements, new laws and regulations or fiscal policy can increase or decrease the value of the US Dollar.
  • Fed, the Federal Reserve of the United States. The Fed controls the monetary policy, through active duties such as managing interest rates.
  • Currencies: This group also includes the following currency pairs: EUR/USD, GBP/USD, USD/JPY, AUD/USD, NZD/USD, EUR/GBP and USD/CHF

USD/CAD FORECAST FOR 2024

2023’s comparatively quiet year in the charts, spurred by broad-market flows into and out of the US Dollar as investors grappled with Fed policy and BoC rate policy stuck in lockstep with Fed rate guidance, is set to give way to an interesting year as central bank policies see increasing risk of divergence with the Canadian economy accelerating into a recession in the first half of 2024.

The USD/CAD will see diverging central bank policy as a key driver through 2024, and the correlation between the Canadian Dollar and Crude Oil is likely to hold firm through the upcoming trading year. Despite musings in recent years about a shakeout in the Loonie-Crude connection, 2023 saw USD/CAD and West Texas Intermediate (WTI) US Crude Oil moving around the charts in lockstep.

The Canadian economy is expected to run into headwinds through the second half of 2024, coinciding with a global growth slowdown that could hamper Crude Oil prices next year as fossil fuels demand flounders in low-growth or recessionary environments.