Canadian Dollar to US Dollar (CAD/USD) Exchange Rate Bearish; Awaiting US Data
The Canadian Dollar (CAD) is currently trading down at 0.9296 against the US Dollar (USD), reaching session highs that breach the 0.93 US cents threshold of 0.9318, whilst also dipping to lows of 0.9288.
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The US Dollar has emerged bullish in the currency market recently following surprisingly favourable data releases such as unemployment claims.
Royal Bank of Canada spokesperson Adam Cole stated: ‘The market has a predisposition to buy [US] Dollars and the consensus is very Dollar-bullish across the board.’
Forex expert Mark McCormick suggests the possibility of the US Dollar rallying in the latter half of 2014, commenting that: The macro story is still supportive,’ of such events. McCormick continued: ‘We look for the USD to gather momentum once we hit September.’
Thursday’s US Initial Jobless Claims and Continuing Claims figures proved favourable for the US showing a less than forecast statistic published. Initial Jobless Claims reached 284K despite forecasts of a 310K figure. Furthermore Continuing Claims dropped to 2500K bypassing the 2510K prediction, causing the US economy to have the lowest number of job-seekers in the latter eight years.
An expert in the field, Brian Daingerfield, commented: ‘Claims haven’t moved higher, corroborating broad improvements seen in other labour-market indicators, including nonfarm payrolls.’
Conversely the Canadian Dollar is trading slightly softer on Friday after warnings by the International Monetary Fund (IMF) have suggested that economies aren’t recovering at the pace of which was previously expected.
Moreover, Canada will see the effects of rising geopolitical tensions, as commodity prices fluctuate and sanctions are placed against Russia.
Canadian Prime Minister, Stephen Harper, has released a statement today commenting: ‘The measures we are announcing today include sanctions against a broad range of entities from Russia’s arms industry, as well as from its financial and energy sectors. Our unequivocal aim is to further increase economic and political pressure on the Putin regime.’
For now the CAD to USD exchange rate remains dependent on movements from the US Dollar or any escalation in global politics. However, the US is due to release Durable Goods Orders data later this afternoon which could cause some movement in the ‘Loonie’. Currently the figure is expected to reach 0.4% in June, in comparison to May’s -0.9%.
If the US is able to continue their run of positive data as economists have forecast, the US Dollar could be set to rally higher. The USD to CAD exchange rate is presently reaching 1.0758, with session highs of 1.0767 thus far.