The US Dollar to Canadian Dollar exchange rate (USD/CAD) exchange rate has seen a minor decline on the afternoon of 24th April.
This marginal deterioration follows the news that crude oil prices on the WTI index are pushing higher, boosting the Canadian Dollar in the process.
Compared to Monday, crude costs have reportedly risen by 1.17%, with the potential to rise even further before Friday.
(First published 24th April, 2018)
Declining GDP Reading could Damage US Dollar to Canadian Dollar (USD/CAD) Exchange Rate
Later this week on 27th April, revised US GDP figures for Q1 2018 will be released. The quarter-on-quarter reading is predicted to be downgraded, from 2.9% to 2%.
Such a slowdown could unsettle US Dollar traders and weaken the currency, leading to worse USD exchange rates.
A GDP downgrade suggests that the US economy has struggled, which could lead to worries that the Federal Reserve will hold off on raising interest rates.
Will USD/CAD Exchange Rate Recover on Forecast-Beating Personal Spending Data?
Despite the potential for a US Dollar to Canadian Dollar (USD/CAD) exchange rate decline at the end of this week, the USD/CAD pairing could recover on 30th April.
High-impact US income data will be released over the afternoon, covering changes to personal incomes as well as the pace of personal spending.
The readings for March are currently predicted to show no major change to levels of income, but a small increase in spending levels from 0.2% to 0.3%.
While minimal, an increase in personal spending could still raise confidence among US Dollar traders and trigger a USD/CAD exchange rate rise.
Higher levels of personal spending may eventually lead to rising retail activity in the US, along with an increase in reported GDP.
Canadian Dollar to US Dollar Exchange Rate (CAD/USD) Forecast to Fluctuate on BOC Governor’s Speech
For Canadian Dollar (CAD) traders, the next event that could affect movement against the US Dollar (USD) will be a speech by the Bank of Canada’s (BOC) Governor.
The current head of the BOC, Stephen Poloz, will be making remarks in Ottawa on 25th April, along with Senior Deputy Governor Carolyn Wilkins.
If Mr Poloz touches on the issue of monetary policy, particularly on whether there could be an interest rate hike in the coming months, then the CAD could advance.
Mr Poloz’s previous remarks have worried CAD traders, particularly when he stated that inflation exceeding the target range wouldn’t guarantee higher interest rates.
Shrinking CA Trade Deficit could Boost CAD/USD Exchange Rate
Looking further ahead, the Canadian Dollar to US Dollar exchange rate (CAD/USD) may rise on 3rd May when Canada’s trade balance reading for March comes out.
This is predicted to show a reduction of the current deficit, with a shift from CA$-2.69bn to CA$-2.1bn.
Although this would still leave Canada with a sizable deficit, such a large move towards the surplus range could nonetheless raise confidence among CAD traders.