Canadian dollar trading continues to be fairly uneventful. There have been a limited number of news stories and events that have directly influenced the Canadian dollar in the past 24 hours. Looking at USD/CAD, USD has registered mild gains against the Canadian dollar over the last four trading sessions. As markets await upcoming US CPI figures and the Federal Reserve meeting later today, movements in the Canadian dollar are likely to be limited. If US inflation strengthens and the Fed is more hawkish than expectations, CAD should weaken as the divergence between US and Canadian economic conditions grows. Our trending indicators continue to suggest a bearish outlook for the Canadian dollar in both the short and medium-term time frames.
The USD/CAD exchange rate is currently above 1.2870. The euro is up slightly against the Canadian dollar. EUR/CAD is currently above 1.510. Lastly, the pound is up against the Canadian dollar, with GBP/CAD trading above 1.7160.
This is a very light week for economic data and events relating to the Canadian dollar. Data including new housing price index figures on Thursday and manufacturing shipments on Friday are unlikely to move the currency. Instead, CAD is more likely to take cues from movements in Canadian dollar bond markets and crude oil prices. Last week, the loonie sold off after the Bank of Canada disappointed markets.
As the Canadian dollar falls on US dollar strength, we are downgrading the currency to bearish in the short-term. Looking at various technical indicators on a daily chart of the Canadian dollar, the currency is now trading within normal conditions.
As the Canadian dollar falls on lower rate hike expectations and weaker crude oil, we are downgrading the currency to bearish in the medium-term. Looking at a weekly chart, the currency is trading within normal conditions. This is based on various technical indicators on the Canadian dollar currency index.