- Canadian Dollar is losing traction after a brief reprieve from US Dollar bidding.
- Canada economic calendar data has wrapped up for the week.
- Crude Oil softly bounces after getting pummeled.
The Canadian Dollar (CAD) finally caught some relief, digging in its heels and clawing back losses from its three-day backslide against the US Dollar (USD). The Loonie found some bids as the Greenback eased slightly heading into the back half of the trading week. Now, markets are seeing a pivot back into USD bidding, and the Loonie is giving back most of its Thursday intraday gains.
There is little of note remaining on the economic calendar for Canada this week, and USD flows will be in the driver’s seat through Friday.
Fed officials delivered dovish comments, jobless claims were mixed, and investors await another appearance from Federal Reserve (Fed) President Jerome Powell later in the day.
Daily Digest Market Movers: Canadian Dollar bounces back as US Dollar slips
- The CAD caught a mild relief rally on Thursday after USD bets trimmed, but the move proved short-lived.
- US Fed Presidents Harker and Barkin gave mildly dovish comments early Thursday, both see potential for downside risks.
- Fed Chairman Jerome Powell speaks later today, investors to be focusing intently.
- Crude Oil prices are finding a slight lift heading into the back half of the week.
- CAD discovers support from recovering Crude bids, accelerating the rebound.
- US Michigan Consumer Sentiment data on Friday to close out the trading week.
Technical Analysis: Canadian Dollar rebounds but shows some weak points
The Canadian Dollar (CAD) found enough bullish spark to push the USD/CAD pair back down the charts, but plenty of upside potential remains in the Greenback, and the pair is currently catching a recovery bounce from 1.3750.
1.3800 is set to be the main battleground for the back half of the trading week, with the pair slipping from an intraday high of 1.3807. A bearish continuation from this region will see a new technical ceiling baked into the USD/CAD.
Intraday action is getting hung up with returns to near-term medians. Most daily price action is sticking close to the 200-hour Simple Moving Average (SMA).
Daily candlesticks see the USD/CAD still on the high side of a higher low pattern firming up from a bullish bounce off the 200-day SMA back in late September. The last swing low saw a topside rebound from the 50-day SMA near 1.3650 just last week.
USD/CAD Daily Chart
Canadian Dollar price today
The table below shows the percentage change of Canadian Dollar (CAD) against listed major currencies today. Canadian Dollar was the strongest against the Pound Sterling.
| USD | EUR | GBP | CAD | AUD | JPY | NZD | CHF | |
| USD | 0.27% | 0.41% | -0.02% | 0.30% | 0.22% | -0.15% | 0.31% | |
| EUR | -0.32% | 0.04% | -0.34% | -0.01% | -0.09% | -0.47% | -0.01% | |
| GBP | -0.40% | -0.06% | -0.42% | -0.20% | -0.17% | -0.55% | -0.06% | |
| CAD | 0.02% | 0.36% | 0.43% | 0.34% | 0.24% | -0.13% | 0.37% | |
| AUD | -0.20% | 0.16% | 0.22% | -0.21% | 0.03% | -0.35% | 0.02% | |
| JPY | -0.21% | 0.11% | 0.15% | -0.23% | 0.03% | -0.37% | 0.09% | |
| NZD | 0.10% | 0.47% | 0.51% | 0.14% | 0.40% | 0.34% | 0.42% | |
| CHF | -0.33% | -0.05% | 0.08% | -0.34% | -0.04% | -0.09% | -0.50% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).
Risk sentiment FAQs
In the world of financial jargon the two widely used terms “risk-on” and “risk off” refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.
Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.
The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.
The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.
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