- Analytics
- News and Tools
- Market News
- Canadian Dollar mixed on Wednesday ahead of Fed rate call
Canadian Dollar mixed on Wednesday ahead of Fed rate call
- Canadian Dollar middles as investors await key Fed appearance.
- Canada PMI missed the mark, to little effect.
- US labor preview worrying bellwether for Friday NFP.
The Canadian Dollar (CAD) is largely flat on Wednesday as broader markets await a key appearance from the US Federal Reserve. Investors have broadly baked in a rate hold from the US central bank today, but markets are looking for a more solid policy guidance stance from the Fed as inflation continues to plague rate cut hopes.
Canada saw a minor tick down in its S&P Global Manufacturing Purchasing Managers Index early in the American trading session, but market momentum remains tepid. US data stands front and center in the midweek market session, with another US Nonfarm Payrolls (NFP) Friday looming at the end of the week.
Daily digest market movers: All eyes on the Fed
- Canada’s April Manufacturing PMI eased to 49.4 from the previous 49.8, missing the forecast improvement to 50.2.
- US ISM Manufacturing PMI also eased to 49.2 from the previous month’s 50.3, falling below the forecast 50.0.
- US ADP Employment Change for April came in at 192K, slightly down from the previous 208K (revised up from 184K), but beating the forecast 175K.
- Fed broadly expected to hold rates on Wednesday, but investors are hoping for signs the Fed will get pushed towards rates sooner rather than later.
- Employment figures could throw a wrench in rate cut hopes with Friday’s US NFP labor data wrapping up the trading week.
- US Interest Rate Decision: Fed set to keep policy steady as markets reassess timing of rate cuts
Canadian Dollar price today
The table below shows the percentage change of Canadian Dollar (CAD) against listed major currencies today. Canadian Dollar was the weakest against the New Zealand Dollar.
| USD | EUR | GBP | CAD | AUD | JPY | NZD | CHF | |
| USD | -0.08% | 0.08% | -0.08% | -0.23% | -0.05% | -0.33% | 0.05% | |
| EUR | 0.07% | 0.15% | 0.01% | -0.15% | 0.03% | -0.25% | 0.12% | |
| GBP | -0.08% | -0.15% | -0.16% | -0.30% | -0.13% | -0.41% | -0.03% | |
| CAD | 0.08% | -0.03% | 0.16% | -0.15% | 0.02% | -0.25% | 0.13% | |
| AUD | 0.23% | 0.14% | 0.30% | 0.14% | 0.16% | -0.10% | 0.27% | |
| JPY | 0.06% | -0.03% | 0.11% | -0.03% | -0.18% | -0.27% | 0.11% | |
| NZD | 0.33% | 0.25% | 0.40% | 0.25% | 0.10% | 0.28% | 0.37% | |
| CHF | -0.06% | -0.14% | 0.02% | -0.14% | -0.28% | -0.15% | -0.38% |
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 mixed as markets focus elsewhere
The Canadian Dollar (CAD) is trading tightly on Wednesday, gaining around a tenth of a percent against the US Dollar (USD) ahead of the latest Fed appearance. The CAD is down a quarter of a percent against the New Zealand Dollar (NZD), early Wednesday’s best-performing currency.
USD/CAD is down slightly from a near-term high around 1.3780, with an immediate technical floor at the 1.3700 handle. The 200-hour Exponential Moving Average (EMA) also provides topside technical support from 1.3707.
USD/CAD remains on the bullish side of the chart despite near-term pullbacks from the last swing high into 1.3850, with the pair trading on the high side of the 200-day EMA at 1.3533. The USD is up 4.4% against the CAD from the December swing low into 1.3175.
USD/CAD hourly chart
USD/CAD daily chart
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.
© 2000-2024. All rights reserved.
This site is managed by Teletrade D.J. LLC 2351 LLC 2022 (Euro House, Richmond Hill Road, Kingstown, VC0100, St. Vincent and the Grenadines).
The information on this website is for informational purposes only and does not constitute any investment advice.
The company does not serve or provide services to customers who are residents of the US, Canada, Iran, The Democratic People's Republic of Korea, Yemen and FATF blacklisted countries.
Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.
Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.
Please contact our PR department if you have any questions or need assistance at pr@teletrade.global.
Bank transfers
