The Canadian Dollar’s Recent Performance
The Canadian Dollar (CAD) experienced a slight decline of 0.25% against the US Dollar on Tuesday, marking its fifth consecutive trading day of slipping back against the Greenback. Since reaching a peak in late September, the CAD has lost almost 2% of its value against the US Dollar.
Factors Contributing to CAD’s Decline:
- Canada’s trade balance figures for August showed a steeper-than-expected contraction.
- Exports decreased, while Imports experienced only a minor increase.
- US trade balance figures remained stable.
- Investors are eagerly awaiting the release of the Fed Meeting Minutes for insights into future rate cuts.
Daily Digest of Market Movers
- The CAD contracted by 0.25% against the Greenback on Tuesday.
- Canadian International Merchandise Trade in August saw a significant decline of $1.1 billion, surpassing the forecast of $-500 million.
- Export reduction played a major role in the decline of Canadian Merchandise Trade.
- There was a softer rise in Imports compared to Exports.
- Fed’s latest Meeting Minutes are set to be released, impacting market sentiments.
Canadian Dollar Price Forecast
The USD/CAD daily chart indicates a clear upward momentum in recent trading sessions. The price has surpassed both the 50-day and 200-day Exponential Moving Averages (EMAs), signaling a potential trend shift or continuation of a bullish trend. The MACD also shows a bullish crossover, suggesting further upward momentum. However, caution is advised as the price approaches potential resistance areas.
Understanding the Canadian Dollar FAQs
Key Factors Affecting CAD:
- Interest rates set by the Bank of Canada influence CAD value.
- Oil prices impact the CAD due to Canada’s reliance on petroleum exports.
- Inflation and Trade Balance play crucial roles in determining CAD strength.
- Economic indicators like GDP and employment data affect the CAD’s performance.
By analyzing these factors, investors can gain a better understanding of the Canadian Dollar’s behavior and make informed decisions in the financial markets.