Canadian Dollar Currency Exchange Update July 16, 2015
USD/CAD Open: 1.2939-1.2940 Overnight Range: 1.2909-1.2950
The Canadian dollar was rangebound in overnight currency exchange markets. Oil is at $51.74 and gold is at $1,143. US futures are higher. There are no major data releases scheduled for today.
The short term Canadian dollar technicals are neutral. For today, USD resistance is at 1.3021. Support is at 1.2786.
The Canadian dollar fell 1.5% yesterday in response to the Bank of Canada’s decision to cut rates by 25bps. Yesterday’s fall has the Canadian dollar trading at a 6 year high, diving lower than the trailing 12 month low of 1.2835 set back in March. Additionally, the BoC revised projections of economic growth downward significantly, now expected GDP growth of 1.1% in 2015, down from 1.9%. The dovish tone from Governor Poloz indicates that further rate cuts are a possibility towards the end of 2015.
In the United States, Fed Chair Yellen expressed greater conviction that the US economy remains on track for a rate hike in 2015 in an appearance before the House Financial Services Committee. Yellen’s increasingly hawkish tone has made a September rate hike more likely, and has fueled broad-based US dollar strength. Diverging monetary policies will remain a driver for the rest of the year for the Canadian dollar. As the Canadian dollar lacks a catalyst in the short-term, this will continue to be a US dollar story.
The perfect storm for the loonie has arrived – weak oil prices, struggling Canadian economy, dovish Bank of Canada, and a relatively stronger US economy. The Canadian dollar lacks catalysts in the short term and will need the domestic economy to turnaround before the Canadian dollar starts to gain traction.
Today’s Suggested Range USD/CAD: 1.2900 – 1.3000
Sincerely,
Rahim Madhavji | Knightsbridge Foreign Exchange | Toll-Free: 1-877-355-5239
www.knightsbridgefx.com
Knightsbridge Foreign Exchange has based the opinions expressed herein on information generally available to the public. Knightsbridge Foreign Exchange makes no warranty concerning the accuracy of this information and specifically disclaims any liability for trading decisions based on the opinions expressed and information contained herein. Such information and opinions are for general information only and are not intended to present advice with respect to matters reviewed and commented upon.
By Admin | July 16, 2015 | Daily Update |
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