Canadian Dollar spreads on quiet Monday, Loonie eases against Greenback amidst holiday trading – Crypto News – Crypto News
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Canadian Dollar spreads on quiet Monday, Loonie eases against Greenback amidst holiday trading – Crypto News

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  • The Canadian Dollar is broadly mixed on the day but slides against US Dollar.
  • Bank of Canada Business Outlook Survey shows further declines in sentiment.
  • Canada CPI inflation is due out Tuesday.

The Canadian Dollar (CAD) is mixed against its major currency peers on Monday but shed weight against the US Dollar (USD) with market volumes thinned out by a US market holiday. 

Canada Wholesale & Manufacturing Sales data beat expectations but is still recovering from recent slumps. The Bank of Canada’s (BoC) Business Outlook Survey also showed that business sentiment soured at an accelerated pace in the fourth quarter of 2023, and investors will look ahead to Tuesday’s Canadian Consumer Price Index (CPI) inflation, which is expected to tick slightly higher YoY.

Daily digest market movers: Canadian Dollar softens against Greenback to kick off new trading week

  • Market volumes are notably thin with US markets off for the Federal holiday on Monday.
  • Canada Wholesale Sales in November beat expectations to print at a three-month high of 0.9%, beating the market forecast of 0.8% and recovering from the previous month’s -0.3% (revised upward from -0.5%).
  • Canada Manufacturing Sales rebounded more than expected, printing at a four-month high of 1.2% in November compared to the forecast for 1.0%, but still well back from October’s -2.9% contraction (revised down slightly from -2.8%).
  • The BoC’s latest Business Outlook Survey showed firms’ outlooks have broadly swung to concerns about declining sales volumes and ongoing price pressures with higher interest rates cited as a major roadblock to continued investment.
  • US markets are dark on Monday in observation of Martin Luther King Day.
  • NA market session sees trading volumes draw tight.
  • CAD traders will be looking forward to Tuesday’s Canada CPI print, forecast to tick higher from 3.1% to 3.3% on an annualized basis.
  • MoM Canada CPI is expected to decline MoM, with December’s CPI forecast to print at -0.3% versus the previous month’s 0.1%.
  • Canada CPI Preview: Forecasts from five major banks
  • US Retail Sales figures due Wednesday, expected to show limited growth in December.

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   -0.05% 0.05% 0.22% 0.43% 0.38% 0.48% 0.27%
EUR 0.05%   0.09% 0.27% 0.48% 0.43% 0.54% 0.31%
GBP -0.06% -0.10%   0.17% 0.38% 0.33% 0.44% 0.21%
CAD -0.23% -0.28% -0.17%   0.20% 0.16% 0.26% 0.04%
AUD -0.43% -0.48% -0.37% -0.21%   -0.04% 0.07% -0.16%
JPY -0.39% -0.44% -0.46% -0.16% 0.05%   0.10% -0.12%
NZD -0.48% -0.54% -0.44% -0.26% -0.06% -0.11%   -0.22%
CHF -0.27% -0.32% -0.22% -0.05% 0.16% 0.11% 0.21%  

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 sees limited topside, USD/CAD tests back into 1.3440

The Canadian Dollar (CAD) sees some gains against the Pacific currency bloc, gaining around four-tenths of a percent against the New Zealand Kiwi (NZD) and about a quarter of a percent against the Australian Dollar (AUD) and the Japanese Yen (JPY). The CAD is down about a quarter of a percent against the Pound Sterling, and in the red about a fifth of a percent against both the US Dollar and the Euro (EUR).

With the US Dollar broadly higher on Monday, the USD/CAD pair is retesting into the 1.3440 region, taking a run at setting a new high for 2024 as the Canadian Dollar continues to shed weight in choppy trading against the USD.

The USD/CAD is now up 2% from December’s swing low into 1.3177, and ongoing bullish momentum has the pair running straight into a technical ceiling at the 200-day Simple Moving Average (SMA) just below the 1.3500 handle.

USD/CAD Hourly Chart

USD/CAD Daily Chart

Risk sentiment FAQs

In the world of financial jargon the two widely used terms “risk-on” and “risk off” refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.

Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.

The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.

The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.

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