Home pages - full list (A-Z)

USD/CAD to Trade at 1.35 on Interest Rate Surprise

The Canadian dollar will weaken to 1.35 to the US dollar should the Bank of Canada surprise investors on Wednesday by keeping interest rates on hold, says the latest research report from BNP Paribas.

Email share     Facebook     LinkedIn    Twitter

Derivatives markets are pricing in a near-80 percent probability that Canadian rates are increased midweek by a quarter-point to 1.5 percent, hence BNP’s expectation that a hike will do little more than “reinforce the current USD/CAD range.”

A decision to hike will likely see USD/CAD at 1.30, says BNP, from Friday’s closing rate of 1.3088.

The Canadian dollar gained 0.3 percent on Friday relative to its US counterpart after data showed Canada adding more jobs than expected for the month of June (+31,800 versus a forecast of +22,300). Canada did, however, see an unexpected tick-up in its unemployment rate to 6.0 percent, from 5.8 percent.

The US employment report, also released on Friday, showed similar traits – more new jobs than expected coupled with an unexpected tick-up in unemployment – but some traders were unhappy with lower-than-expected earnings growth of 0.2 percent (0.3 percent expected).

Scotiabank, like most others, foresees the Bank of Canada raising interest rates next week but also offers their technical perspective on USD/CAD.

“Downside risks are building,” one of Scotia’s FX strategists said on Friday, indicated by “net losses last week…against the long-term retracement resistance at 1.3385.”

Scotiabank’s year-end forecast for USD/CAD stands at 1.28. The bank also sees the “loonie” strengthening against the Australian dollar, to 0.935 per AUD, and against the Japanese yen, to 86.0. EUR/CAD, however, will remain unchanged at levels close to 1.535.



Further Reading


Disruptors Challenging Australian Banks in Forex Price and Service: ACCC Report

Key Takeaways from the ACCC inquiry into currency conversion services. BestExchangeRates referenced among comparison sites playing an important role in customer awareness of the excessive currency margins charged by banks.

Last update: 11 Dec, 2019

AUD/GBP Between a Rock and a Hard Place – USD Strength


Both the Australian dollar and British pound sterling have had a hard time of late caught between the rock of the China/US trade war and the Brexit hard place.

Last update: 27 Aug, 2019

Australia Cuts Interest Rates to Record Low

RBA Australian dollar AUD currency news and forecasts

The RBA has cut Australian interest rates to a record low of 1 percent in an effort to boost inflation. The Australian dollar is slightly stronger following the widely expected decision but is expected to lose 5–7 percent of its value before year-end.

Last update: 14 Aug, 2019


Posted to: News

Please note that the opinions of our authors are their own and do not reflect the opinion of Best Exchange Rates and should not be taken as a reference to buy or sell any financial product.

Get a Better FX Deal when you Send and Spend Abroad.


Do NOT follow this link or you will be banned from the site!