News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Wall Street
Mixed
Gold
Mixed
GBP/USD
Mixed
USD/JPY
Mixed
More View more
Real Time News
  • Heads Up:🇺🇸 Fed Mester Speech due at 13:00 GMT (15min) https://www.dailyfx.com/economic-calendar#2020-09-23
  • Heads Up:🇺🇸 House Price Index MoM (JUL) due at 13:00 GMT (15min) Previous: 0.9% https://www.dailyfx.com/economic-calendar#2020-09-23
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.27%, while traders in NZD/USD are at opposite extremes with 66.87%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/peklh4PMnX
  • Entry orders are a valuable tool in forex trading. Traders can strategize to come up with a great trading plan, but if they can’t execute that plan effectively, all their hard work might as well be thrown out. Learn how to place entry orders here: https://t.co/lAFyv1gM0P https://t.co/fXShtfgera
  • Forex Update: As of 12:00, these are your best and worst performers based on the London trading schedule: 🇬🇧GBP: -0.07% 🇪🇺EUR: -0.14% 🇨🇭CHF: -0.17% 🇨🇦CAD: -0.25% 🇳🇿NZD: -0.76% 🇦🇺AUD: -0.80% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/qpVEMWkF9W
  • Fed Vice Chair Clarida says he wants inflation to spend some above 2%, adds that he is not going to think about raising rates until actual inflation is 2%
  • Key levels in forex tend to draw attention to traders in the market. These are psychological prices which tie into the human psyche and way of thinking. Learn about psychological levels here:https://t.co/1oygcFMFNs https://t.co/9VjJlOHuz8
  • China's cabinet says will step up punishment for irregularities such as market manipulation and insider trader
  • 🇺🇸 MBA Mortgage Applications (18/SEP) Actual: 6.8% Previous: -2.5% https://www.dailyfx.com/economic-calendar#2020-09-23
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.27%, while traders in NZD/USD are at opposite extremes with 65.57%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/Ti993zOjDP
Canadian Dollar Eyes Bank of Canada Rate Decision as Covid-19 Cases Rise

Canadian Dollar Eyes Bank of Canada Rate Decision as Covid-19 Cases Rise

2020-09-05 02:00:00
Dimitri Zabelin, Analyst
Share:
USDCAD Price Chart

Chart created with TradingView

OUTLOOK: Bearish

Bank of Canada (BOC) Rate Decision

The Canadian Dollar will be closely watching the Bank of Canada rate decision following the latest meeting on July 15. Officials have warned that while the Canadian economy has somewhat reopened, the road to recovery will be long, bumpy and uneven across sectors and regions. The BOC warned that the outlook is highly uncertainty and their normal models cannot account for the unprecedented ambiguity of the situation.

Officials said the road to recovery will require “considerable” monetary policy support, and added that they are prepared to provide additional stimulus as needed. They emphasized that they will maintain accommodative policy until their 2 percent inflation target is sustainably achieved. The operative word here is “sustainable” given that the Covid-19 has crushed consumer and business confidence.

Having said that, the central bank said recent indicators appear to suggest that the economy bottomed out in April. Furthermore, they anticipate a short-burst of “exceptionally strong near-term growth” will follow a gradual reopening of the economy. Having said that, the caveat they insert was this initial flare up of economic activity will be followed by a “slower and bumper recuperation phase”. Their models indicate that:

The pandemic will have largely run its course by the middle of 2022, because either a vaccine or an effective treatment is widely available by then. Our policy discussions were guided by this scenario, while recognizing the extreme uncertainty around these assumptions” – BOC.

With this in mind, the Bank of Canada will continue with its large scale asset purchase program involving the $5b billion a week purchase of government bonds. With inflation likely to take a long time before sustainably keeping around the 2% inflation target, accommodative monetary conditions are likely to remain present. However, this – at least, since March – has not kept the Canadian Dollar down versus its G10 counterparts.

USD/CAD, CAD/JPY – Daily Chart

USD/CAD Price Chart

USD/CAD chart created using TradingView

Follow me on Twitter @ZabelinDimitri for more market updates!

CAD has risen along with other growth-oriented assets on the back of robust risk appetite and unprecedented support from monetary authorities around the world. It has risen with particular veracity versus the haven-linked US Dollar that continues to trade at a two-year low. Having said that, the upcoming rate decision could curb some of CAD’s gains if officials paint a gloomier picture than they did in July.

US Economic Data May Stir Canadian Dollar

Initial jobless claims and consumer price index (CPI) data out of the US may rattle markets and push the cycle-sensitive Canadian Dollar lower if the statistics show a worrying trend. Last Thursday, US ISM data showed alarming figures that catalyzed massive selloff in equity markets and commodity-linked currencies like CAD along with NZD and AUD.

The reverberations out of the US affect Canada in particular due to the latter’s strong reliance on the former’s robust economic activity to fuel their exports. As a result, a weakening outlook out of the world’s largest economy may send a chilling message particularly among its immediate neighbors. To learn more, see my core-perimeter trading model here.

--- Written by Dimitri Zabelin, Currency Analyst for DailyFX.com

To contact Dimitri, use the comments section below or @ZabelinDimitri on Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES