Yahoo Finance USD/CAD Daily Fundamental Forecast – January 15, 2018
The USDCAD pair moved lower during the course of the day on Friday and it was largely on the lines of what we have been saying over the last couple of weeks, even during times when the pair had been moving higher. We had mentioned that the pair was in the grip of the bears and hence any bounce in the pair should be viewed as an opportunity to sell and go short on the pair and those who had managed to do that, when the pair had been close to 1.26 should have benefited by now.
USDCAD Moves Back Below 1.25
The pair has been pushed lower mainly by the weakness in the dollar that has been seen all across the markets. The dollar has been under pressure due to the political and economic developments surrounding the US in general and the NAFTA talks in particular. These are the talks that most concern the US and Canada and though there have been reports that the US would be pulling out of these talks, that has not happened as yet and the market is watching the progress very closely to gauge how the talks would go.
The CAD has been well supported and buoyed by the strong oil prices which continue to move higher. With the production cut continuing and likely to be extended even further during the course of this year, there does not seem to be anything that is likely to reverse this rise in oil prices for the near future and this has helped the CAD immensely. The incoming data from Canada has also been generally good, though the dismal building permits data should be a matter of concern. This has led to the belief that the BOC would hike rates pretty soon.
Looking ahead to the rest of the day, we do not have any major news from Canada while it is a bank holiday in the US. The BOC rate statement and the announcement is scheduled for later in the week and we can expect trade positioning to happen ahead of that.
This article was originally posted on FX Empire
