Jump to a section -> GBPEURUSDCentral BanksPoliticsBrexit

Canadian Dollar (CAD) Exchange Rate Falls Flat After Hitting Nine-Day High (CAD/USD)

November 6, 2017 5:13 pm | Modified November 6, 2017 5:13 pm
CAD, USD | BY admin

The Canadian Dollar was trending in a tight range against the US Dollar (CAD/USD) on Monday after the exchange rate reached a nine-day high on Friday following some positive ecostats. The Canadian economy printed stronger-than-expected jobs data on Friday which spurred a Loonie rally and encouraged speculation that the Bank of Canada (BoC) might be tempted to increase interest rates more quickly next year.

Canada’s economy created 35,300 jobs in October, and wage growth marked its biggest increase in 18 months. Economists had only forecast a 15,000 increase in jobs.

Industry expert Andrew Kelvin commented:

‘Most importantly, we saw a little bit more acceleration in wages … the labour data does support tighter [monetary] policy at some point next year and perhaps sooner than later.’

The Bank of Canada has hiked interest rates twice this year already, once in July and again in September–the latter was a surprise to markets. As a result of the labour market data, the Canadian Dollar rose up against the US Dollar to 78.57 cents, from 77.95 cents before the release.

However, some industry experts have stated that while the Bank of Canada may be slightly encouraged by the figures, that policymakers would need more convincing before rates rose again.

Banking giant Morgan Stanley has also suggested that the Canadian Dollar could be on-course for some losses.

Strategist Gek Teng Khoo commented:

‘We think the market is overpricing the path of rate hikes from the Bank of Canada for now. The market is pricing in two more rate hikes by the end of 2018, but BoC Governor Poloz sounds increasingly cautious in his communications.’

Bank of Canada Governor Stephen Poloz is expected to speak in Montreal during Tuesday’s trading, and his speech will be followed up with a press conference, both of these events could have a major impact on how the Canadian currency trades.

The Canadian Dollar to US Dollar (CAD/USD) exchange rate is trending in the region of 0.7830.

Share this Post
Global Reach

Other Posts