Canadian Dollar eases back on data-light Tuesday
- Canadian Dollar backslides 0.4% against Greenback after mixed US data.
- Canada delivers BoC’s latest rate call on Wednesday.
- Broader markets pivot to Wednesday’s ADP jobs data, Friday’s NFP.
The Canadian Dollar (CAD) broadly fell on Tuesday, further erasing recent gains against the US Dollar (USD). 1.3600 is proving too tough of a nut for USD/CAD sellers to crack, and the pair remains mired in technical congestion since falling from the year’s highs near 1.3840 in mid-April.
Canada is absent from the economic data docket on Tuesday, leaving the Canadian Dollar at the mercy of broad market sentiment. Mixed US data, combined with an extended backslide in Crude Oil prices, has left investors with one foot planted firmly in safe havens and eroded near-term buying strength in the CAD. The Bank of Canada (BoC) is broadly expected to deliver its first quarter-point interest rate cut on Wednesday, nearly a year after the Canadian central bank raised rates to a 23-year-high of 5.0% last July.
Daily digest market movers: US data drives markets after mixed data and steepening revisions
- US Factory Orders in April rose 0.7% MoM, better than the forecast of 0.6%, but March’s figures saw a steep downside revision to 0.7% from the initial print of 1.6%.
- US JOLTS Job Openings in April also slipped back, falling to 8.059 million versus the forecast of 8.34 million. The previous month’s initial print was also revised to 8.355 million from 8.488 million.
- The BoC is expected to cut interest rates by 25 basis points on Wednesday, bringing Canada’s main policy rate down to 4.75% from 5.0%. The BoC will also deliver its latest Monetary Policy Statement.
- US ADP Employment Change figures due Wednesday to serve as a volatile preview of Friday’s US Nonfarm Payrolls.
- US ADP Employment Change for May is expected to slip back to 173K from 192K, while Friday’s NFP is expected to show the US added 190K jobs in May compared to the previous 175K.
Canadian Dollar PRICE Today
The table below shows the percentage change of Canadian Dollar (CAD) against listed major currencies today. Canadian Dollar was the weakest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.20% | 0.15% | -0.84% | 0.43% | 0.70% | 0.28% | -0.75% | |
| EUR | -0.20% | -0.05% | -1.03% | 0.25% | 0.49% | 0.09% | -0.95% | |
| GBP | -0.15% | 0.05% | -0.97% | 0.30% | 0.55% | 0.16% | -0.87% | |
| JPY | 0.84% | 1.03% | 0.97% | 1.29% | 1.54% | 1.11% | 0.11% | |
| CAD | -0.43% | -0.25% | -0.30% | -1.29% | 0.26% | -0.15% | -1.16% | |
| AUD | -0.70% | -0.49% | -0.55% | -1.54% | -0.26% | -0.41% | -1.41% | |
| NZD | -0.28% | -0.09% | -0.16% | -1.11% | 0.15% | 0.41% | -1.00% | |
| CHF | 0.75% | 0.95% | 0.87% | -0.11% | 1.16% | 1.41% | 1.00% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Canadian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent CAD (base)/USD (quote).
Technical analysis: USD/CAD poised for another spin around midrange
The Canadian Dollar (CAD) is broadly lower on Tuesday, losing ground against the majority of its major currency peers. The CAD is steeply lower against the Japanese Yen (JPY), falling -1.25% against the day’s best-performing currency, and has shed nearly -1.10% against the Swiss Franc (CHF). The CAD still managed to find higher ground against the Australian Dollar (AUD), gaining a third of a percent against the Aussie.
USD/CAD has bounced back from another dip toward 1.3600, climbing into the 1.3700 handle after the Canadian Dollar shed over four-tenths of a percent against the Greenback. The pair is caught in sideways churn, and a near-term demand zone just above 1.3600 is keeping bids bolstered as the CAD struggles to find buyers.
With the BoC set to widen the interest rate differential between the CAD and the USD on Wednesday, investors will be keeping an eye on any spikes that could kick off a leg higher and send the USD/CAD back into 2024’s peaks at 1.3846. On the low side, long-term technical support sits at the 200-day Exponential Moving Average (EMA) at 1.3560.
USD/CAD hourly chart
USD/CAD daily chart
Economic Indicator
BoC Interest Rate Decision
The Bank of Canada (BoC) announces its interest rate decision at the end of its eight scheduled meetings per year. If the BoC believes inflation will be above target (hawkish), it will raise interest rates in order to bring it down. This is bullish for the CAD since higher interest rates attract greater inflows of foreign capital. Likewise, if the BoC sees inflation falling below target (dovish) it will lower interest rates in order to give the Canadian economy a boost in the hope inflation will rise back up. This is bearish for CAD since it detracts from foreign capital flowing into the country.
Next release: Wed Jun 05, 2024 13:45
Frequency: Irregular
Consensus: 4.75%
Previous: 5%
Source: Bank of Canada