Canadian Dollar to US Dollar (CAD/USD) Exchange Rate Bullish; Awaiting Influential Figures
The Canadian Dollar (CAD) is presently trading against the US Dollar at 0.9147, placing the ‘Loonie’ at its lowest trading value against the ‘Buck’ in the latter two months. Friday has seen the Canadian Dollar reach session highs of 0.9176, whilst also dipping to lows of 0.9146.
If you're looking to make an international money transfer, we recommend TorFX.
Thursday saw Canadian Gross Domestic Product (GDP) figures rise to the forecast 2.3% in May, showing a growth of Canada’s production alongside consumption of goods and services.
However, Canada has maintained interest rates near record lows for the latter four years and the Canadian economy is now suffering lethargy. Governor for the Bank of Canada Stephen Poloz feels that the Canadian economy is not in a strong enough position for the bank to raise interest rates, hinting that a cut could be possible.
Expert in the field Sebastien Lavoie suggested: ‘Governor Poloz does not want to be fooled by a false start on economic underlying trend before shifting its guidance. Consequently, this respectable GDP number will not be enough to move the Bank of Canada away from its firm neutral stance.’
Conversely the US Dollar has seen great support with confidence data showing surprisingly high figures. With the US economy producing such favourable data, economists anticipate a more hawkish Federal Reserve.
Forex expert Steven Englander stated: ‘It’s hard to be a dove in these circumstances and that’s what the market is picking up on.’
Conversely, the currency world appears optimistic that the US Dollar will continue to gain against other currency majors.
Industry expert Martin Rudings suggests: ‘There’s scope for further US Dollar strength. For the remainder of the year, the US economy is going to continue to recover quite strongly. That’s just going to help support the Dollar.’
The Federal Open Market Committee (FOMC) decided to continue their current trajectory with fiscal policy, following the decision to eliminate bond buying by October.
The FOMC stated: ‘Fiscal policy is restraining economic growth, although the extent of restraint is diminishing.’
Canada will see the release of Canadian Manufacturing Purchasing Manufacturers Index today which will hopefully show expansion in the manufacturing industry; meanwhile the US will publish a mass of varied data.
Change in Non-Farm Payrolls will prove highly significant to highlight the change in employment within the US economy.
Furthermore Unemployment Rate will reach publication alongside it, proving to be highly influential for the ‘Buck’ as the Federal Reserve hinted that employment figures will be linked to interest rate hikes.
The US Dollar is currently bullish in the currency market, and will be likely to stay domineering if the US figures can prove favourable today. The ‘Loonie’ however has suffered a drop following fears of the Canadian economy’s recovery becoming sluggish. The current USD to CAD exchange rate rests at 1.0935.