Canadian Dollar treading water as investors gear up for Canada & US GDP, US PCE inflation figures – Crypto News – Crypto News
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Canadian Dollar treading water as investors gear up for Canada & US GDP, US PCE inflation figures – Crypto News

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  • The Canadian Dollar is grappling with sideways momentum on Monday.
  • Markets look ahead to key data for both the US and Canada in the latter half of the week.
  • US PCE inflation & ISM Manufacturing, Canada GDP & employment change are on the horizon.

The Canadian Dollar (CAD) is middling against the US Dollar (USD) in early Monday trading, and markets are set for a calmer start to the week before high-impact figures for both the US and Canada begin to print in the back half of the trading week.

Loonie traders will be keeping an eye on Gross Domestic Product (GDP) growth figures from Canada on Thursday, with November’s Canadian Net Change in Employment slated for Friday. 

On the USD side of the economic calendar, broader markets will see the FX space driven by US Core Personal Consumption Expenditures (PCE) price inflation on Thursday, as well as US ISM Manufacturing Purchasing Managers Index (PMI) figures on Friday.

Daily Digest Market Movers: Canadian Dollar treads water as markets take a breather before the mid-week data calendar gets underway

  • Monday sees flat action on the Canadian Dollar side as investors await headlines or a change in underlying momentum.
  • Loonie traders look ahead to Thursday’s Canadian GDP growth, markets expect a rebound to 0.2% annualized growth after the previous quarter’s -0.2% print.
  • Canadian data releases to be overshadowed by US figures this week, the main focus will be US PCE inflation numbers for October, expected to show a slight decline in inflation price growth from 3.7% to 3.5% for the annualized period into October.
  • US PCE inflation to print alongside Canadian GDP figures at 13:30 GMT on Thursday.
  • Friday sees Canadian wages and labor figures alongside November’s US ISM Manufacturing PMI.
  • The trading week will cap off with a late Friday appearance from Federal Reserve (Fed) Chairman Jerome Powell, due to participate in a “fireside chat” labeled “Navigating Pathways to Economic Mobility” at Atlanta’s Spelman College.

Canadian Dollar price today

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

  USD EUR GBP CAD AUD JPY NZD CHF
USD   -0.12% -0.23% -0.05% -0.40% -0.64% -0.42% -0.23%
EUR 0.13%   -0.10% 0.08% -0.26% -0.50% -0.28% -0.10%
GBP 0.24% 0.10%   0.18% -0.16% -0.39% -0.19% 0.00%
CAD 0.06% -0.07% -0.18%   -0.34% -0.58% -0.37% -0.18%
AUD 0.40% 0.27% 0.16% 0.34%   -0.24% -0.03% 0.17%
JPY 0.63% 0.49% 0.33% 0.58% 0.24%   0.21% 0.41%
NZD 0.42% 0.29% 0.18% 0.36% 0.02% -0.23%   0.20%
CHF 0.23% 0.10% 0.00% 0.17% -0.16% -0.40% -0.19%  

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 grinds sideways but leaning towards the top end as markets await a spark in the headlines

The Canadian Dollar (CAD) is caught in a tight range between 1.3660 and 1.3630 against the US Dollar (USD) for Monday’s trading window, but testing on the low side towards 1.3620 heading into the back half of the trading day.

The USD/CAD is currently capped by the 50-hour Simple Moving Average (SMA) descending into 1.3665, with intraday support currently priced in at the day’s lows near 1.3620.

Near-term bullish momentum will see a technical ceiling at the 200-hour SMA drifting into the 1.3700 handle, and rallies could see bidders getting caught in a short squeeze, though a topside break of last Friday’s peak of 1.3712 will see a shift in the lower-highs pattern.

On the daily candlesticks, the USD/CAD remains trapped under the 50-day SMA, and the pair is drifting toward the median at the 200-day SMA, just north of the 1.3500 handle.

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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