Australian Dollar to Canadian Dollar Exchange Rate Ends Week Higher after CAD Plummet
The Australian Dollar to Canadian Dollar exchange rate has fluctuated in a wide range, but following a slump in demand for the Canadian Dollar mid-way through the week the pair generally trended above the week’s opening levels of 0.9838 until it slipped closer to those levels on Friday afternoon.
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Australian Dollar (AUD) Shoots Higher against CAD on Brief Risk Rally
The Australian Dollar has had difficulty making solid advances in recent weeks, as market focus on the US Dollar and its attempts to recover have regularly undermined the ‘Aussie’s appeal.
As a risk-correlated currency, the ‘Aussie’ can underperform even amid solid Australian economic news if markets have little interest in investing in risky assets. As a result, Tuesday’s plummet in US Dollar demand enabled the Australian Dollar to advance – as well as the risky Canadian Dollar.
Bank of Canada (BOC) Decision Undermines Canadian Dollar
The Australian Dollar was ultimately the winner last week as solid Australian economic data from the last month left the Australian currency far more appealing than its Canadian counterpart, following the Bank of Canada’s (BOC) September policy meeting.
The meeting, held on Wednesday, led to a ‘Loonie’ plummet after policymakers dwelt on Canada’s poor growth in Q2 2016. The bank even hinted that stimulus may be necessary if things don’t improve, a far cry from hopes of any monetary tightening.
Because of this, the Australian Dollar was in a better position than the ‘Loonie’ for the rest of the week, even though decent oil commodity news boosted the oil-correlated CAD slightly on Friday.
Australian Dollar to Canadian Dollar Forecast: Australian Unemployment Ahead
Next week’s economic calendar is relatively quiet for Canada, meaning that the Australian Dollar is more likely to drive AUD/CAD exchange rates – at least later in the week.
For most of the week, it’s likely that risk-sentiment in the foreign exchange market will determine whether AUD/CAD advances or falls.
As iron ore prices have struggled to hold their best levels without plummeting, an increase in prices of Australia’s most lucrative commodity may be unlikely. And indeed, if the US Dollar continues to recover from its worst levels, this could make the ‘Aussie’ an easy rival to capitalise on.
However, the Canadian Dollar will need supportive commodity news of its own in order to take advantage of this. Even amid a strong US Dollar, the market fixation on oil in recent weeks has allowed the ‘Loonie’ to advance even in risk-off markets if oil news impresses.
As hopes of an oil production freeze increased last week due to news that Russia and Saudi Arabia would cooperate in stimulating oil prices, continued speculation about whether an oil production freeze is likely could drive prices of the commodity next week.
Later in the week, key Australian unemployment scores for August will be published. This print came in surprisingly high in July, indicating a healthy Australian job market. Another solid report like that could boost AUD/CAD considerably towards the end of the week.
At the time of writing, the Australian Dollar to Canadian Dollar exchange rate trended in the region of 0.9845, while the Canadian Dollar to Australian Dollar exchange rate traded at around 1.0155.