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
More View more
Canadian Dollar Forecast: USD/CAD Chasing Oil, CAD Data Key for BoC Hike

Canadian Dollar Forecast: USD/CAD Chasing Oil, CAD Data Key for BoC Hike

Justin McQueen, Strategist

CAD, USD/CAD, Analysis and Talking Points

  • Canadian Data In Focus for Near Term BoC Outlook
  • Canadian Dollar Underpinned by Oil

Canadian Data In Focus for Near Term BoC Outlook

Today will see the first of two major data points that could cement a January rate hike from the Bank of Canada. The BoC Business Outlook Survey, which is a key input for the central bank’s assessment of the economy will likely remain. However, a key caveat is that the Q4 survey will likely have captured the period prior the spread of the Omicron variant and subsequent lockdown. That being said, a strong report will be enough to see an increase in tightening bets and thus underpinning the Canadian Dollar. In turn, should a strong report today be followed up with a higher than expected inflation print tomorrow, it will be harder to argue against a January hike. Although, as I have noted before, the aggressive market pricing for 2022 remains a tall order.

Canadian Dollar Forecast: USD/CAD Chasing Oil, CAD Data Key for BoC Hike

Source: Refinitiv, DailyFX

Canadian Dollar Underpinned by Oil

Taking a look at the Canadian Dollar, given the continued rise across the oil complex, the Canadian Dollar is likely to play catch-up and thus another move towards 1.2450 is in sight, should 1.25 give way.

Canadian Dollar vs Brent Crude Futures

Canadian Dollar Forecast: USD/CAD Chasing Oil, CAD Data Key for BoC Hike

Source: Refiniiv

A Helpful Guide to Support and Resistance Trading

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

DISCLOSURES