The US Dollar to Canadian Dollar (USD/CAD) exchange rate dived by around -0.75% on Tuesday afternoon.
In the wake of disappointing data out of the US, which saw durable goods orders decline significantly, the ‘Greenback’ (USD) dived versus the majority of its most traded currency rivals. A very positive consumer confidence score wasn’t enough to avoid continued declination.
The Canadian Dollar, meanwhile, is generally trending higher thanks to improving oil prices.
The US Dollar to Canadian Dollar (USD/CAD) exchange rate is currently trending in the region of 1.2387.
US Dollar (USD) Exchange Rate Dives on Disappointing Data
US Durable Goods Orders was forecast to climb from -2.1% to 0.3%, but the actual result declined to -3.4%. ‘The Dollar should perhaps give back a little ground on the basis of the durable goods data — they were unequivocally weak and well below expectations,’ said Shaun Osborne, chief currency strategist at Toronto-Dominion Bank, Canada’s largest lender. ‘The issue is perhaps participation. The storm is keeping people at home and markets are fairly illiquid it seems.’
Wednesday’s Federal Open Market Committee meeting is likely to cause significant US Dollar volatility. Rate hawks will be hoping for a cash rate increase, but disappointing results from domestic data eases pressure on the Federal Reserve.
The US Dollar to Canadian Dollar (USD/CAD) exchange rate dropped to a low today of 1.2376.
Canadian Dollar (CAD) Exchange Rate Gains as Oil Futures Rise
The commodity-correlated ‘Loonie’ (CAD) gained support on Tuesday as a result of improving oil prices. However, most expect continued declination as the supply glut continues. ‘Supply and demand and the rules of economics will govern. It will take time for the current glut to be removed,’ Chief Executive Officer Khalid Al-Falih said at a conference in Riyadh. ‘Saudi Arabia will not singlehandedly balance the market in a downturn,’ he said, reiterating government policy.
US Dollar to Canadian Dollar (USD/CAD) Exchange Rate Forecast to Recover
Given that oil prices are expected to resume declination, and with the US consumer confidence data printing positively, the US Dollar to Canadian Dollar (USD/CAD) exchange rate has the potential to recover losses.
The US Dollar to Canadian Dollar (USD/CAD) exchange rate reached a high today of 1.2500.