USD/CAD – Canadian Dollar Inches Higher, Investors Await BoC Rate Decision

USD/CAD continues to trade sideways this week. In the Tuesday session, the pair is trading at 1.2441, up 0.09% on the day. It’s a quiet day on the release front, with no Canadian events. In the US, the sole indicator is the Empire State Manufacturing Index. The indicator is expected to climb to 18.4 points.

All eyes are on the Bank of Canada, which holds its monthly policy meeting on Wednesday. Most experts expect the BoC to raise rates by a quarter-point, from 1.0% – 1.25%. The last time the benchmark rate was above 1.0% was back in December 2008. The Canadian economy has looked strong of late, underscored by unexpectedly strong employment data. At the same time, BoC Governor has some concerns about the economy, particularly looming dark clouds over NAFTA. The free-trade agreement, crucial to the Canadian economy, is in trouble, as US President Trump has threatened to cancel the pact unless Mexico and Canada make major concessions to the US. If the agreement is terminated, the Canadian dollar would likely take a tumble.

The Canadian dollar held recorded strong gains in December, and has held its own against the greenback in January. There are two important factors for this positive trend. First, Canada recorded outstanding employment numbers in the past two months. In December, the economy added 78.6 thousand jobs, defying experts who predicted a minuscule gain of 1.8 thousand. This release comes on the heels of a superb November release, when the economy added 79.5 thousand news jobs. The unemployment rate dropped to 5.7% in December, down from 5.9% a month earlier. Second, the recent rise in oil prices, which are up 6.7% since December 1, has boosted the commodity-based Canadian currency.

Dovish BoC Remains a Risk Ahead of Rate Decision


Tuesday (January 16)

  • 8:30 US Empire State Manufacturing Index. Estimate 18.5

Wednesday (January 17)

  • 9:15 US Capacity Utilization Rate. Estimate 77.3%
  • 9:15 US Industrial Production. Estimate 0.3%
  • 10:00 BoC Monetary Policy Report
  • 10:00 BoC Rate Statement
  • 10:00 BoC Overnight Rate. Estimate 1.25%
  • 11:15 BoC Press Conference

*All release times are GMT

*Key events are in bold


USD/CAD for Tuesday, January 16, 2018

USD/CAD, January 16 at 7:45 EDT

Open: 1.2429 High: 1.2452 Low: 1.2418 Close: 1.2441


USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.2060 1.2190 1.2351 1.2494 1.2630 1.2757

USD/CAD was flat in the Asian session. In European trade, the pair edged higher but has retracted

  • 1.2351 is providing support
  • 1.2494 is the next resistance line
  • Current range: 1.2351 to 1.2494

Further levels in both directions:

  • Below: 1.2351, 1.2190 and 1.2060
  • Above: 1.2494, 1.2630, 1.2757 and 1.2860

OANDA’s Open Positions Ratio

USD/CAD ratio is almost unchanged in the Tuesday session. Currently, long positions have a majority (56%), indicative of trader bias towards USD/CAD continuing to move to higher ground.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Kenny Fisher

Market Analyst at OANDA
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

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