Canadian Dollar trims back from Tuesday highs after markets pivot into Greenback – Crypto News – Crypto News
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USD/CAD to enjoy further gains towards 1.3650 – Scotiabank USD/CAD to enjoy further gains towards 1.3650 – Scotiabank

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Canadian Dollar trims back from Tuesday highs after markets pivot into Greenback – Crypto News

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  • Canadian Dollar pares back recent gains, but price action remains nearby.
  • Canada sees GDP figures on Wednesday, Manufacturing PMI on Thursday.
  • US JOLTS beat trims rate cut bets ahead of Wednesday’s FOMC policy statement.

The Canadian Dollar (CAD) shed some points on Tuesday after a moderate data-beat for December’s US JOLTS Job Openings pushed investors back into the US Dollar (USD). 

Canada brings November’s Gross Domestic Product (GDP) figures on Wednesday, which will be followed by the Canadian S&P Global Manufacturing Purchasing Managers Index (PMI) data on Thursday.

The broad market focus this week continues to be Wednesday’s US Federal Reserve (Fed) rate call. Friday brings another print for the US Nonfarm Payrolls (NFP).

Daily digest market movers: Canadian Dollar pulls back from near-term highs

  • Canadian Dollar is largely mixed on Tuesday but moderately down against Tuesday’s top performers in the US Dollar and the Euro (EUR).
  • US JOLTS Job Openings in December came in at 9.026 million versus the expected decline to 8.75 million from November’s 8.925 million (revised from 8.79 million).
  • Initial prints in US labor figures continue to see revisions on an ongoing basis, JOLTS has been revised every month since at least October 2013.
  • JOLTS data to see further adjustments from March 6 when the Bureau of Labor Statistics (BLS) incorporates annual updates to current employment statistics as seasonal adjustment factors.
  • JOLTS print pushes rate cut expectations further down, rate swaps now see 62% chance of no rate cut from the Fed in March, 17% chance of no rate move in April, according to CME’s FedWatch Tool.
  • Investors will be looking for a firmer pivot from Fed Chairman Jerome Powell on Wednesday.
  • Fed Monetary Policy Statement slated for 19:00 GMT Wednesday, Federal Open Market Committee (FOMC) Press Conference scheduled for 30 minutes later.
  • Canadian GDP forecast to tick up slightly from 0.0% to 0.1% in November.
  • Friday’s US NFP forecast to slip to 180K in January from December’s 216K.

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 Euro.

  USD EUR GBP CAD AUD JPY NZD CHF
USD   -0.06% 0.40% 0.11% 0.44% 0.26% 0.31% 0.24%
EUR 0.06%   0.46% 0.18% 0.51% 0.32% 0.37% 0.30%
GBP -0.40% -0.45%   -0.28% 0.05% -0.13% -0.09% -0.15%
CAD -0.10% -0.15% 0.30%   0.33% 0.16% 0.21% 0.14%
AUD -0.43% -0.49% -0.03% -0.32%   -0.18% -0.12% -0.18%
JPY -0.25% -0.30% 0.15% -0.14% 0.16%   0.06% -0.02%
NZD -0.29% -0.35% 0.10% -0.18% 0.15% -0.03%   0.01%
CHF -0.24% -0.30% 0.15% -0.12% 0.21% 0.03% 0.06%  

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 Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).

Technical Analysis: Canadian Dollar pulls back from recent highs against US Dollar

The Canadian Dollar (CAD) is moderating on Tuesday, gaining a quarter to a third of a percent against the Pound Sterling (GBP) and the Australian Dollar (AUD), while declining around a sixth of a percent against the US Dollar and the Euro.

The USD/CAD tested into the low side at the 1.3400 handle early Tuesday before a Greenback rally made up for near-term losses as USD/CAD splashes around the familiar 1.3430 level.

USD/CAD continues to drift into the low side as the pair grapples with a bearish crossover of the 50-day and 200-day Simple Moving Averages (SMA), pricing in a near-term technical ceiling near the 1.3500 handle. 

A continued drag down will see the USD/CAD crack through 1.3400 to make a fresh run at the last swing low near December’s bottom bid of 1.3177.

USD/CAD hourly chart

USD/CAD daily chart

Fed FAQs

Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates.
When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money.
When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.

The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions.
The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.

In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system.
It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.

Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.

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