The Canadian dollar is mostly stronger today, but is trading flat against the US dollar and the British pound. Looking at CAD versus its major peers, the loonie is currently gaining against the euro and the Japanese yen. While crude oil prices are currently falling, the impact from lower commodity prices has had a limited impact on the Canadian dollar today. This week's economic calendar is relatively light, and as such markets are awaiting the Bank of Canada's interest rate decision and statement tomorrow. The consensus expects the BoC to raise rates by 0.25% to 1.25%. Given the upbeat tone of the Bank's business outlook survey (published last week), we also believe that a rate hike is in store. Our short-term trending indicator is currently bullish, while our medium-term outlook is neutral.
The USD/CAD exchange rate is currently above 1.2430. The euro is down against the Canadian dollar, with EUR/CAD currently above 1.5190. The pound is flat against the Canadian dollar, with GBP/CAD trading above 1.7130.
Looking at economic data and events this week, all eyes will be on the BoC's upcoming interest rate decision and statement this Wednesday. There are no other major economic releases or events this week. Last week, the Bank of Canada's Business Outlook Survey suggested an upbeat outlook for future growth.
As the Canadian dollar rallies on rate hike hopes, we are upgrading the currency to bullish in the short-term. Looking at various technical indicators on a daily chart of the Canadian dollar, the currency is now trading within a normal range.
As the Canadian dollar strengthens on higher crude oil prices and rate hike hopes, we are upgrading the currency to bullish 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.