Canadian Dollar looking to lock in gains for the week in back-and-forth trading – Crypto News – Crypto News
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Faces rejection near 1.3000 mark, bullish potential intact Faces rejection near 1.3000 mark, bullish potential intact

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Canadian Dollar looking to lock in gains for the week in back-and-forth trading – Crypto News

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  • The CAD caught a bounce on risk appetite in early Friday trading.
  • Industrial inflation figures in Canada print better than expected.
  • US Dollar, Fed reaction is driving the market today.

The Canadian Dollar (CAD) is looking to pare back some of Thursday’s losses, catching some support from bolstered Crude Oil bids, but downside risks remain.

The Loonie is up about half a percent against the US Dollar (USD) for the week.

Canadian industrial inflation figures went head-to-head with US housing data Friday morning, but overall, risk sentiment appears to be the primary driver of moment-to-moment market moves.

Daily Digest Market Movers: Canadian Dollar unable to develop long legs to round out the week

  • Canada’s Raw Material Price Index for October showed a 2.5% decline after September’s 3.9% jump (revised from 3.5%).
  • Month-on-month Industrial Product Prices into October similarly declined 1%, contracting from the previous 0.4%.
  • US Building Permits and US Housing starts both beat expectations, helping to arrest the Greenback’s early Friday slide and capping off CAD gains.
  • US economy showed 1.487 million new building permits, beating the forecast of 1.45 million and clearing the previous month’s 1.471 million.
  • US monthly Housing Starts also showed improvement, printing at 1.372 million versus the forecast for 1.35 million. September saw ground broken on 1.346 million new residential buildings.
  • Crude Oil is seeing some lift on Friday, bolstered by rumors of additional EU sanctions on Russian Crude Oil exports.
  • A back-and-forth trading week leaves the CAD strung along Friday’s mid-range.
  • The overall trading week was also middling for the Loonie as the USD drove broad-market momentum. 

Technical Analysis: Canadian Dollar strung along the middle for Friday as markets second-guess direction

The Canadian Dollar (CAD) is testing chart territory below 1.3750 against the US Dollar (USD), but the day’s Loonie bids are coming under threat as USD/CAD bidders make a feeble push.

The USD/CAD hit a daily low of 1.3708 before seeing a thin rebound toward 1.3740.

The pair hit a mid-week high near 1.3780 on Thursday, and CAD bidders have been struggling to pare away the bounce from the mid-week low near 1.3660.

Daily candlesticks have the USD/CAD consolidating in rough trading just above the 50-day Simple Moving Average (SMA), and technical indicators are beginning to grind toward the middle.

USD/CAD Hourly Chart

USD/CAD Daily Chart

Canadian Dollar price this week

The table below shows the percentage change of Canadian Dollar (CAD) against listed major currencies this week. Canadian Dollar was the strongest against the US Dollar.

  USD EUR GBP CAD AUD JPY NZD CHF
USD   -1.78% -1.64% -0.42% -2.03% -1.13% -1.29% -1.72%
EUR 1.75%   0.13% 1.32% -0.24% 0.64% 0.48% 0.06%
GBP 1.61% -0.14%   1.19% -0.38% 0.49% 0.35% -0.08%
CAD 0.42% -1.35% -1.21%   -1.59% -0.71% -0.86% -1.29%
AUD 1.98% 0.24% 0.37% 1.56%   0.87% 0.72% 0.29%
JPY 1.11% -0.63% -0.48% 0.69% -0.90%   -0.12% -0.58%
NZD 1.27% -0.49% -0.36% 0.83% -0.73% 0.14%   -0.43%
CHF 1.68% -0.07% 0.07% 1.26% -0.32% 0.56% 0.41%  

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).

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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