The US Dollar Canadian Dollar (USD CAD) exchange rate has fallen again after spiking by nearly a cent yesterday as the oil price rollercoaster began to ascend once again.
US Dollar Canadian Dollar (GBP CAD) Pressured By Rising Oil Prices
The high-yield Canadian Dollar has risen in parallel with oil prices despite a larger than expected rise in US crude stocks, with the latest figures showing that they rose to 5274k, up from 2432k the previous week.
Oil prices were boosted by comments from Russian energy minister Alexander Novak which indicated that Russia may be willing to talk with Saudi Arabia about OPEC deals to cut global crude production.
However the ‘Loonie’ is likely to fall again with oil becoming increasing volatile in the run up to OPEC’s next meeting at the end of November, with markets speculating on the likelihood of an agreement finally being signed.
Lacklustre US Industrial Production Weighs on US Dollar
The USD CAD exchange rate also suffered yesterday thanks to a disappointing drop in US industrial production. Figures showed that production slid to 0.0% in October, down from 0.1% the month before, falling short of an expected rise to 0.2%.
US manufacturing also failed to impress on Wednesday as data showed that production stagnated in October, failing to rise to 0.3% as forecast as it remained at 0.2%.
USD CAD Forecast: Rise in US CPI may Bolster US Dollar
The US Dollar to Canadian Dollar exchange rate may rally later today if the US consumer price index rises from 1.5% to 1.6% as expected, although should inflation not rise as predicted then the ‘Greenback’ could tumble further.
It will be a similar story on Friday for the Canadian Dollar when Canada releases its own CPI data, which is forecast to rise from 1.3% to 1.5% in October, with the ‘Loonie’ likely to fall against the US Dollar should the figures fail to impress.
Looking longer-term the US Dollar is likely to remain fairly strong thanks to ever increasing odds that the Federal Reserve will raise interest rates in December, with markets currently putting the chances of a rate hike at over 90%. Donald Trump’s surprise win in the US elections last week had the opposite effect than many analysts predicted and actually supported expectations for higher borrowing costs.
Current Interbank Exchange Rates
At the time of writing the USD/CAD exchange rate was trending around 1.34 and the CAD/USD exchange rate was trending around 0.74.
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