Canadian Dollar to US Dollar (CAD/USD) Exchange Rate Reaches Weekly Highs
The Canadian Dollar (CAD) is currently trading at 0.9308 against the US Dollar (USD) with session highs of 0.9326 and lows of 0.9301. The CAD to USD exchange rate may see fluctuation however in the upcoming week with a wealth of significant US data published.
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The Canadian Dollar has been performing consistently in recent weeks, remaining within the 93 US cents region, described by some economists as ‘uncomfortably’ high; declaring the breaking through to the 94 cents threshold unsustainable.
Despite the currency flirting with the 94 US cents region, it has now fallen below; however the currency is still believed to be overvalued by economists.
An expert in the field, Sal Guatieri commented: ‘At 93 US cents, it is overpriced, as witnessed by a chronic trade deficit (five years and counting) and steady one-way traffic over the border.’
Speculation has surrounded the Bank of Canada, firstly pertaining to their recent decision to maintain interest rates at 1%, where they’ve resided for the former four years; and secondly with their decisions of how to handle the increasingly persistent ‘Loonie’, as a higher currency will affect exporters.
Guatieri stated: ‘Short of cutting rates or selling the currency, dovish talk is about the only weapon it has left to counter the ‘Loonie’s’ true best friend: higher short term rates.’
Guatieri continued: ‘Since the Canadian Dollar began rising in March, the number of Canadian’s visiting the States (and returning with cheaper goods) has begun climbing again after ebbing in the previous year. Meantime the number of Americans setting foot in Canada is pretty much glued to record lows.’
The ‘Loonie’ has seen volatility recently similar to other commodity currencies amid geo-political events pertaining to the downing of the Malaysian Airlines flight last week.
An economist for BMO Nesbitt Burns commented: ‘Declining employment, fading natural gas prices and rising geopolitical tensions also landed a few body blows on the ‘Loonie’ in the past week.’
However with no data releases for Canada this week, the ‘Loonie’ will be dependent on other currency movements and geopolitical tensions to signal any shift in the Canadian currency.
UPDATED 16:45 GMT 23 July 2014
As the North American session continued the Canadian Dollar to US Dollar (CAD/USD) exchange rate held on to earlier gains as investors looked ahead to tomorrow’s US news, including the nation’s Markit Manufacturing PMI.
The measure of manufacturing is expected to show a modest increase from 57.3 to 57.5, pushing further above the 50 mark separating growth from contraction. A surprising decline could reduce the ‘Greenback’s appeal.
Other US reports to be aware of include the nation’s Continuing Claims and Initial Jobless figures and US New Home Sales data.
The Canadian Dollar to US Dollar (CAD/USD) exchange rate approached the end of European trading holding in the region of 0.9312
UPDATED 10:00 GMT 24 July 2014
The Canadian Dollar (CAD) is trading well on Thursday currently reaching 0.9324 against the US Dollar (USD). This session has seen highs of 0.9330 whilst also dipping to lows of 0.9309 thus far.
The Canadian Dollar saw gains after favourable retail sales data climbed by 0.7% on Wednesday bypassing forecasts of an increase of only 0.6%.
An expert in the field, Adam Button, stated: ‘The underlying momentum in the Canadian economy is solid.’
Any shift in the Canadian Dollar to US Dollar (CAD/USD) currency pairing on Thursday will most likely be due to US news; until then the US Dollar to Canadian Dollar exchange rate is presently trading at 1.0731.