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- Canadian Dollar treads softly to kick off light Monday trading
Canadian Dollar treads softly to kick off light Monday trading
- The Canadian Dollar is adrift on a thin market at the start of the trading week.
- Canada’s Remembrance Day holiday has most provinces out of the office for Monday.
- The economic calendar is sparse this week, little Canadian data on offer.
The Canadian Dollar (CAD) is finding little momentum in thin holiday markets, with the majority of Canadian provinces and territories taking the day off in observance of Remembrance Day.
There’s little of note on the economic data docket for the CAD this week, and the Loonie will be at the whim of overall market sentiment as the trading week unwinds.
Daily Digest Market Movers: Canadian Dollar shifting around a base of thin bids for Monday
- Monday momentum is limited, capping momentum in either direction to kick off the early trading week.
- There is a notable lack of viable economic data on offer for CAD traders this week.
- Loonie to trade according to market flows with a hefty US data schedule slated for this week.
- Early Tuesday will see Bank of Canada (BoC) Deputy Governor Toni Gravelle deliver talking points while participating in a panel discussion labeled "Challenges for Financial Stability and Financial Regulation amid Heightened Uncertainty".
- BoC Dep Gov Gravelle is participating in the Third High-Level Conference on Global Risk, Uncertainty, and Volatility, in Zurich, Switzerland.
- The BoC’s Council Member is not expected to move markets much, but investors will want to keep an eye out.
Technical Analysis: Canadian Dollar sees thin action for Monday, US Dollar in the driver’s seat
The CAD is seeing thin markets on Monday as it trades against the US Dollar (USD), and shifting sand beneath the Greenback is sending the USD/CAD pair down below the 1.3800 handle for Monday. Thin markets are set to keep the Loonie-Dollar pair constrained for the early part of the week’s trading session.
The USD/CAD is struggling to maintain bullish momentum following last week’s rebound from the 50-day Simple Moving Average (SMA) near 1.3630. A continuation of downside moves will see last Friday’s rejection from 1.3850 firm up into a technical ceiling below November’s early high bids near 1.3900.
On the downside, a bearish extension will see challenges from the 200-day SMA currently pushing upward through 1.3500. A lack of recent directional momentum is seeing technical indicators begin to drift toward the middle, with the Relative Strength Index (RSI) currently heading into the 50.0 median barrier.
USD/CAD Daily Chart
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 New Zealand Dollar.
| USD | EUR | GBP | CAD | AUD | JPY | NZD | CHF | |
| USD | -0.06% | -0.32% | -0.12% | -0.31% | 0.06% | 0.09% | -0.03% | |
| EUR | 0.06% | -0.26% | -0.06% | -0.26% | 0.12% | 0.15% | 0.03% | |
| GBP | 0.30% | 0.26% | 0.18% | 0.00% | 0.35% | 0.39% | 0.28% | |
| CAD | 0.12% | 0.06% | -0.19% | -0.19% | 0.18% | 0.20% | 0.09% | |
| AUD | 0.31% | 0.25% | 0.00% | 0.19% | 0.37% | 0.41% | 0.28% | |
| JPY | -0.07% | -0.13% | -0.35% | -0.19% | -0.33% | 0.04% | -0.09% | |
| NZD | -0.09% | -0.13% | -0.39% | -0.20% | -0.38% | -0.02% | -0.11% | |
| CHF | 0.03% | -0.03% | -0.28% | -0.09% | -0.28% | 0.09% | 0.13% |
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).
Canadian Dollar FAQs
What key factors drive the Canadian Dollar?
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.
How do the decisions of the Bank of Canada impact 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.
How does the price of Oil impact the Canadian Dollar?
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.
How does inflation data impact the value of the Canadian Dollar?
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.
How does economic data influence the value of 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.
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