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. See our updated Privacy Policy here.

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
Subscribe
Please try again
Wall Street
Bearish
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
More View more
Real Time News
  • All eyes on the Fed on Wednesday as investors weigh on chances of a taper announcement. Get your weekly equities forecast from @HathornSabin here: https://t.co/Cv06XcvldF https://t.co/I12g2YPkdE
  • Knowing how to accurately value a stock enables traders to identify and take advantage of opportunities in the stock market. Find out the difference between a stock's market and intrinsic value, and the importance of the two here: https://t.co/QszmdZFxlk https://t.co/KsPiWBysiR
  • GDP (Gross Domestic Product) economic data is deemed highly significant in the forex market. GDP figures are used as an indicator by fundamentalists to gauge the overall health and potential growth of a country. Learn use GDP data to your advantage here: https://t.co/Yl9vM7kO6a https://t.co/iUvhLfQgcK
  • The US Dollar caught a bid in the late part of last week to set a fresh September high. FOMC is around the corner, are bulls going to be able to push for another fresh high? Get your weekly US Dollar forecast from @JStanleyFX here: https://t.co/ZkDHyV1VhM https://t.co/w5sPChKdNx
  • The Federal Reserve System (the Fed) was founded in 1913 by the United States Congress. The Fed’s actions and policies have a major impact on currency value, affecting many trades involving the US Dollar. Learn more about the Fed here: https://t.co/ADSC4sIHrP https://t.co/bde30KM8OE
  • The Australian Dollar remains vulnerable to most of its major counterparts, with AUD/USD and AUD/JPY resuming losses. Did AUD/NZD bottom? AUD/CAD may consolidate. Get your weekly Australian Dollar forecast from @ddubrovskyFX here: https://t.co/sjh91mjtXs https://t.co/dGT067zKnH
  • Technical analysis of charts aims to identify patterns and market trends by utilizing differing forms of technical chart types and other chart functions. Learn about the top three technical analysis tools here: https://t.co/KDjIjLdTSk https://t.co/VLZQhrQTAf
  • The ISM manufacturing index plays an important role in forex trading, with ISM data influencing currency prices globally. Learn about the importance of the ISM manufacturing index here: https://t.co/Xr3xtoFpZy https://t.co/j5xDAG6LLb
  • While the meetings of central bankers in the US, Japan and the UK will be front, left and center of traders’ minds this coming week, it would be wise not to ignore next Sunday’s German Federal Election. Get your euro forecast from @MartinSEssex here: https://t.co/m920Uvmngm https://t.co/yQYtfHf66s
  • Take a closer look visually at the most influential global importers and exporters here: https://t.co/G58J1dg6y3 https://t.co/Dqq9S9vGvo
CAD Outlook and Near Term BoC Rate Path to be Dictated by Canadian GDP

CAD Outlook and Near Term BoC Rate Path to be Dictated by Canadian GDP

Justin McQueen, Strategist

CAD Analysis and Talking Points

  • Canadian GDP to determine BoC July rate move
  • Trade War tensions raises risk of BoC hold

Data Dependent Bank of Canada

The outlook for the Canadian Dollar and the BoC’s rate path in the near term (July meeting) will likely be dictated by the upcoming GDP figures and BoC survey, scheduled at 12:30GMT and 14:30GMT respectively. The annual GDP rate is expected to dip to 2.5% from 2.9%, which would represent a fall to 0% from 0.3% for the monthly figure. Recent data from Canada has been a touch softer, which in turn raises the downside risks to today’s GDP report. As such, if GDP misses expectations then this could provide a further warning that the underlying economy is weak and thus push back rate hike expectations.

CAD Outlook and Near Term BoC Rate Path to be Dictated by Canadian GDP

Trade Wars Raises Risk of Hold

Although the Bank of Canada emphasises that they are data dependent, Governor Poloz stated that the central bank would incorporate the recent escalation in trade war tensions and actions into their forecasts at the July meeting. As such, while this keeps a July rate hike on the table where OIS markets are pricing in a 67% chance of a hike, it does however increase the risks of a potential hold, which could see CAD remain on a bearish trend.

CAD Outlook and Near Term BoC Rate Path to be Dictated by Canadian GDP

Source: Thomson Reuters

IG Client Positioning Sentimentthe combination of current sentiment and recent changes gives us a stronger USDCAD-bullish contrarian trading bias. For full client positioning click here

USDCAD PRICE CHART: Daily Time Frame (March 2017-July 2018)

CAD Outlook and Near Term BoC Rate Path to be Dictated by Canadian GDP

Chart by IG

USDCAD has failed twice to breach above 1.3385 (76.4% Fibonacci retracement of the 1.3793-1.2061 fall), a softer GDP figure could see this breached. However, with momentum on the downside as RSI indicators shift lower, a better than expected reading may see USDCAD make a test for 1.31.

--- Written by Justin McQueen, Market Analyst

To contact Justin, email him at Justin.mcqueen@ig.com

Follow Justin on Twitter @JMcQueenFX

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

DISCLOSURES