CAD to USD Exchange Rate Today: Canadian Dollar Plummets to 0.9200 versus US Dollar
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The Canadian Dollar is hovering precariously on the 92 US cents precipice, after trading within the 94 US cents region for weeks.
The Canadian Dollar is trading in the currency market amid geopolitical tensions with the EU and the US currently enforcing sanctions on Russia, following the tragic downing of a civilian airliner en route from Holland to Malaysia. This has led to some doubt surrounding the Canadian commodity currency.
Canadian Prime Minister Stephen Harper commented: ‘In the wake of continued aggression by Russia, which includes the ongoing supply of logistical support and weapons systems to agents of the Putin regime in eastern Ukraine, Canada is announcing its intent to once again increase economic and political pressure, in the coming days, by imposing additional sanctions on the regime and those closest to it.’
Conversely the US Dollar has been gaining strength in the currency market, after a wealth of favourable US data. Today will see the Federal Open Market Committee (FOMC) announce interest rate decisions, which although currently forecast to stagnate at 0.25%, may show some direction for the much speculated rate hikes.
Representative for Westpac Bank, Richard Franulovich, commented: ‘There is some expectation for the FOMC meeting to include some mention of an upgrade in current conditions in the US economy. That’s possibly driving a bit of Dollar demand.’
In anticipation of the Federal Reserve announcement, the ‘Loonie’ can only trade lower against the Bullish ‘Buck’. Alternatively, Canada has experienced a quiet week by way of data releases; with Thursday set to announce Gross Domestic Product figures that are forecast to rise to 2.3% in May, in comparison to April’s 2.1% year-on-year.
Furthermore, Canada will publish Manufacturing PMI on Friday which could boost the ‘Loonie’ against some other majors if favourable.
However, Wednesday is an extremely influential for the US Dollar with the release of Mortgage Applications, followed by highly anticipated Employment Change figures. If employment data proves favourable, the US Dollar is likely to gain further following the Federal Reserve’s recent, more hawkish positioning, stating that any interest rates hikes will be dependent on employment figures.
Foreign exchange expert Ian Gordon commented: ‘The market is starting to get more comfortable with the idea that a shift in (the Fed’s) tone is coming, and they’re positioning for it.’
Moreover, the US will also see the publication of Gross Domestic Product figures this afternoon, alongside Personal Consumption data. At 19:00 GMT the Federal Reserve will announce Pace of MBS and Treasury Purchases, alongside the FOMC interest rate decision.
Barclays representative Aroop Chatterjee stated: ‘The overall picture is of a continuing US recovery.’
For now it appears that the ‘Loonie’ will continue to be bearish in the CAD to USD exchange rate, whilst the US Dollar appears set to rally higher.
The USD to CAD exchange rate is currently residing at 1.0864.