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2 Jan 2014
USD/CAD resumes bullish trend
FXstreet.com (London) - USD/CAD has seen another rebound in USD strength against the CAD after starting the week at a three-year high at CAD1.0735. USD/CAD is currently trading at CAD1.0650, recovering the bullish trend that dominated the last half of 2013.
USD/CAD climbing on diverging economic expectations
The Canadian dollar posted its biggest annual drop in 5 years in 2013, declining 6.6 percent against the greenback. Improving US economic expectations led to the Federal Reserve trimming its monthly asset purchase programme by USD10bn to USD75bn a month. In contrast, Bank of Canada governor Stephen Poloz has taken an increasingly dovish tone and played down potential for rate hikes and emphasising the 2 percent inflation target. The declines in the loonie will help towards this target, with a weaker loonie importing domestic price inflation on US goods.
US manufacturing could cut gains
US manufacturing PMIs due later today could cut USD/CAD gains. Consensus expectations are for a decline to 56.8 from November’s three-year highs at 57.3. In the interim CAD/USD could drift higher. The pair hit a morning high of CAD1.0653 and remains in a bullish trend.
USD/CAD climbing on diverging economic expectations
The Canadian dollar posted its biggest annual drop in 5 years in 2013, declining 6.6 percent against the greenback. Improving US economic expectations led to the Federal Reserve trimming its monthly asset purchase programme by USD10bn to USD75bn a month. In contrast, Bank of Canada governor Stephen Poloz has taken an increasingly dovish tone and played down potential for rate hikes and emphasising the 2 percent inflation target. The declines in the loonie will help towards this target, with a weaker loonie importing domestic price inflation on US goods.
US manufacturing could cut gains
US manufacturing PMIs due later today could cut USD/CAD gains. Consensus expectations are for a decline to 56.8 from November’s three-year highs at 57.3. In the interim CAD/USD could drift higher. The pair hit a morning high of CAD1.0653 and remains in a bullish trend.