Canadian Dollar falls back against Greenback on Thursday as buck bets rebound – Crypto News – Crypto News
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Despite CAD resilience this week, further weakness likely – Rabobank Despite CAD resilience this week, further weakness likely – Rabobank

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Canadian Dollar falls back against Greenback on Thursday as buck bets rebound – Crypto News

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  • Canadian Dollar rises, but USD rises faster.
  • Canada brings Retail Sales data to fore on Friday.
  • US PMIs came in mixed on Thursday.

The Canadian Dollar (CAD) is broadly higher on Thursday, climbing against most of its major currency peers, but the US Dollar (USD) is getting bid higher, faster. Investors are paring back Greenback selling after a Fed-fueled midweek splurge, bolstering the US Dollar across the board.

Canada will return to the economic calendar with meaningful data on Friday. Retail Sales figures for January are expected to decline around half a percent after rising nearly a full percent in December. 

Daily digest market movers: US Dollar dominates on US data flows

  • US S&P Global Purchasing Managers Index (PMI) figures printed a split on Thursday.
  • March’s US Manufacturing PMI rose to 52.5 from the previous 52.2, easily vaulting over the forecasted decline to 51.7.
  • The Services PMI for March fell more than expected, declining to 51.7 from the previous month’s 52.3, falling more than the forecast 52.0.
  • US Initial Jobless Claims slipped to 210K for the week ended March 15, missing the forecasted increase to 215K from the previous week’s 212K (revised upward from 209K).
  • Analysts from Scotiabank have noted that the month of April tends to be the Canadian Dollar’s best-performing month against the Greenback.
  • Scotiabank: April is the CAD’s best month of the calendar year against the USD

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 US Dollar.

  USD EUR GBP CAD AUD JPY NZD CHF
USD   0.71% 1.03% 0.45% 0.39% 0.61% 0.71% 1.50%
EUR -0.72%   0.32% -0.26% -0.33% -0.12% 0.01% 0.79%
GBP -1.05% -0.33%   -0.59% -0.63% -0.45% -0.32% 0.46%
CAD -0.47% 0.26% 0.59%   -0.05% 0.13% 0.26% 1.04%
AUD -0.40% 0.32% 0.64% 0.06%   0.19% 0.33% 1.10%
JPY -0.58% 0.13% 0.45% -0.16% -0.19%   0.14% 0.91%
NZD -0.71% 0.00% 0.32% -0.26% -0.33% -0.10%   0.80%
CHF -1.51% -0.79% -0.47% -1.06% -1.12% -0.90% -0.80%  

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: US Dollar rebounds, bullish CAD gets outperformed

The Canadian Dollar (CAD) is broadly higher on Thursday, gaining ground against nearly all of its major currency peers despite falling around four-tenths of a percent against the US Dollar. The CAD is struggling to hold flat against the day’s other over-performing currency, the Australian Dollar (AUD).

The USD/CAD is on the rise in Thursday trading, cutting in approximately 0.6% in bullish momentum bottom-to-top. The pair caught a bounce from the 1.3460 region, reclaiming the familiar 1.3500 handle in intraday trading.

Thursday’s recovery etches in a technical rejection from the 200-day Simple Moving Average (SMA) at 1.3485. A rangebound USD/CAD pattern looks set to continue in the near term.

USD/CAD hourly chart

USD/CAD daily chart

 

Inflation FAQs

Inflation measures the rise in the price of a representative basket of goods and services. Headline inflation is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core inflation excludes more volatile elements such as food and fuel which can fluctuate because of geopolitical and seasonal factors. Core inflation is the figure economists focus on and is the level targeted by central banks, which are mandated to keep inflation at a manageable level, usually around 2%.

The Consumer Price Index (CPI) measures the change in prices of a basket of goods and services over a period of time. It is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core CPI is the figure targeted by central banks as it excludes volatile food and fuel inputs. When Core CPI rises above 2% it usually results in higher interest rates and vice versa when it falls below 2%. Since higher interest rates are positive for a currency, higher inflation usually results in a stronger currency. The opposite is true when inflation falls.

Although it may seem counter-intuitive, high inflation in a country pushes up the value of its currency and vice versa for lower inflation. This is because the central bank will normally raise interest rates to combat the higher inflation, which attract more global capital inflows from investors looking for a lucrative place to park their money.

Formerly, Gold was the asset investors turned to in times of high inflation because it preserved its value, and whilst investors will often still buy Gold for its safe-haven properties in times of extreme market turmoil, this is not the case most of the time. This is because when inflation is high, central banks will put up interest rates to combat it. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold vis-a-vis an interest-bearing asset or placing the money in a cash deposit account. On the flipside, lower inflation tends to be positive for Gold as it brings interest rates down, making the bright metal a more viable investment alternative.

 

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