Entering the second trading week of August, the Canadian dollar remains at or near multi-month highs against many of the world's major currencies. The "loonie" has been well supported since the end of June following a hawkish repricing of Canadian interest rate expectations.
The Canadian dollar weakened slightly during Monday’s European session to 1.3 per US dollar, from Friday’s seven-week high (USD/CAD low) of 1.297; it also traded at 1.5 per euro, within a whisker of a two-month high; it neared a seven-month high versus the British pound, at 1.685; and it remains at an eight-month high versus the New Zealand dollar, at 0.876.
With Canadians enjoying a public holiday on Monday, trading in the world’s sixth largest currency is expected to be quiet throughout the approaching New York session, but that hasn’t stopped Hong Kong-based researchers at Citibank offering new Canadian dollar forecasts. In a note on Monday morning, Citi’s team predicted USD/CAD at 1.25 in 6-12 months’ time, and the bank is therefore expecting 4 percent upside in the loonie’s buying power. Citi does, however, highlight the importance of fruitful trade talks between the US and Canada for any meaningful moves below 1.30.
Friday is expected to be the busiest day this week in the Canadian dollar markets given the consecutive release of closely-watched US inflation data and the monthly Canadian jobs report. For the latter release, it is likely that figures similar to last month (+32,000 new jobs and wage growth of 3.5 percent) are needed to cement market expectations for an October rate hike by the Bank of Canada.
Of the other majors, the Canadian dollar has benefitted most in recent months against the New Zealand dollar and the pound. While the New Zealand dollar remains pressured by rising trade tensions and falling dairy prices, the currency of the United Kingdom continues to weaken on the back of Brexit developments, the latest of which sees “no deal” assigned a 60 percent probability by UK trade secretary Liam Fox.
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.
General advice: The information on this site is of a general nature only. It does not take your specific needs or circumstances into consideration. You should look at your own personal situation and requirements before making any legal, accounting or financial decisions. The foreign exchange rates and products compared on this page and website are chosen from a range of products that bestexchangerates.com (BER) has access to and are not
representative of all the products available in the market.
We may receive referral fees in relation to your activity on the BER website however this doesn't affect the exchange rates or fees you are charged.
The use of terms "Best" and "Top" are not product ratings and are subject to our disclaimer.