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- The Canadian dollar moved in both directions on the back of mixed US data released on Thursday.
- Canada is missing from the economic calendar until Friday’s GDP update.
- Inflation in the US PCE price index also looms on Friday.
The Canadian Dollar (CAD) delivered a mixed performance on Thursday after a light economic calendar on the Canadian side left the Canadian dollar fluctuating amid a mixed print in key US numbers. Markets are preparing for the US personal reading on Friday Consumption expenses The Price Index Inflation Index (PCE) was released following a buoyant schedule for the US release on Thursday.
Canada is absent from the economic calendar on Thursday, leaving CAD traders in the lurch until Friday’s Canadian GDP update for April.
However, Friday’s U.S. PCE data is expected to outperform Canada’s overall GDP figures. As a key reading for inflation in Federal Reserve (Fed), Market attention will be squarely focused on US price growth figures to end the trading week.
Daily Market Movers Summary: US Data Comes in Mixed, CAD Follows
- Durable goods orders in the US fell in May, recording -0.1% on a monthly basis versus expectations of 0.2%, which is more than the expected decline from the previous 0.4%.
- US Q1 GDP came in exactly as expected, with Q1 GDP revised slightly to 1.4% from the initial reading of 1.3%.
- Initial jobless claims in the United States beat expectations as net jobless claims came in at 233,000 for the week ended June 21. The median market forecast was for a reading of 236,000 compared to the previous week’s 238,000.
- Core US PCE, a preview of Friday’s PCE price index, rose to 3.7% in the first quarter versus an expected flat 3.6%.
- Canadian GDP is expected to rebound on a monthly basis on Friday in May to 0.3% from the previously flat reading.
- The U.S. core PCE price index is expected to ease to 0.1% in May from 0.2% previously.
Canadian dollar price today
The table below shows the percentage change in the value of the Canadian Dollar (CAD) against the major currencies listed today. The Canadian dollar was the strongest against the Swiss franc.
| American dollar | euro | GBP | JPY | Bastard – scoundrel | Australian Dollar | New Zealand dollar | Swiss Franc | |
|---|---|---|---|---|---|---|---|---|
| American dollar | -0.23% | -0.16% | -0.03% | -0.08% | -0.02% | -0.05% | 0.14% | |
| euro | 0.23% | 0.06% | 0.19% | 0.13% | 0.21% | 0.15% | 0.36% | |
| GBP | 0.16% | -0.06% | 0.14% | 0.08% | 0.16% | 0.11% | 0.31% | |
| JPY | 0.03% | -0.19% | -0.14% | -0.05% | 0.00% | -0.06% | 0.18% | |
| Bastard – scoundrel | 0.08% | -0.13% | -0.08% | 0.05% | 0.04% | 0.03% | 0.21% | |
| Australian dollar | 0.02% | -0.21% | -0.16% | -0.01% | -0.04% | -0.03% | 0.15% | |
| New Zealand dollar | 0.05% | -0.15% | -0.11% | 0.06% | -0.03% | 0.03% | 0.20% | |
| Swiss Franc | -0.14% | -0.36% | -0.31% | -0.18% | -0.21% | -0.15% | -0.20% |
The heat map shows the percentage changes in major currencies against each other. The base currency is selected from the left column, while the quote currency is selected from the top row. For example, if you select the Canadian dollar from the left column and scroll along the horizontal line to the US dollar, the percentage change displayed in the box will be CAD (base)/USD (quote).
Technical Analysis: Canadian dollar swings amid weak data on Thursday, but gains remain minimal
The Canadian dollar had a mixed performance on Thursday, posting a mediocre performance in generally calm markets. The Canadian dollar rose by more than a tenth of a percent against the Swiss franc and the Japanese yen, but fell by five percent against the euro and the British pound.
usd/cd The price remains stuck near the opening bids on Thursday after an early dip to 1.3680. The pair remains stuck in a price action trap near the 1.3700 handle as intraday buying bids are stalled at the 200-hour exponential moving average (EMA) at 1.3692.
The daily candlesticks are forming a bullish bounce after drifting above the 50-day moving average at 1.3676 and are set to snap a near-term losing streak after the pair failed to recover to the upside above the 1.3800 handle earlier in June.
Hourly chart of the USD/CAD pair
USD/CAD Daily Chart
Frequently asked questions about the Canadian dollar
The main factors that move the Canadian dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of oil, Canada’s largest export, the health of its economy, inflation and the trade balance, which is the difference between the value of Canada’s exports and its imports. Other factors include market sentiment – whether investors are moving into riskier assets (risk-on) or seeking safe havens (risk-off) – with risk-on being positive for the Canadian dollar. As its largest trading partner, the health of the U.S. economy is also a major factor affecting the Canadian dollar.
The Bank of Canada (BoC) has significant influence on the Canadian dollar by setting the level of interest rates that banks can lend to each other. This affects the level of interest rates for everyone. The Bank of Canada’s main goal is to keep inflation at 1-3% by adjusting interest rates up or down. Relatively high interest rates tend to be positive for the Canadian dollar. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD negative and the latter positive.
The price of oil is a major factor affecting the value of the Canadian dollar. Oil is Canada’s largest export, so the price of oil tends to have an immediate impact on the value of the Canadian dollar. In general, if the price of oil rises, the Canadian dollar also rises, as overall demand for the currency increases. The opposite is true if the price of oil falls. Higher oil prices also tend to increase the likelihood of a positive trade balance, which also supports the Canadian dollar.
While inflation has always been thought to be a negative factor for a currency because it reduces the value of money, the opposite is the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to prompt central banks to raise interest rates, attracting more capital flows from global investors looking for a profitable place to keep their money. This increases the demand for the local currency, which in Canada’s case is the Canadian dollar.
Macroeconomic data measures the health of the economy and may have an impact on the Canadian dollar. Indicators such as GDP, purchasing managers’ indexes in the manufacturing and services sectors, employment, and consumer sentiment surveys can influence the direction of the Canadian dollar. A strong economy is good for the Canadian dollar. Not only does it attract more foreign investment, but it may encourage the Bank of Canada to raise interest rates, leading to a stronger currency. However, if economic data is weak, the Canadian dollar will likely fall.
