USD/CAD – Canadian dollar slips to 4-month low as risk appetite slips

The Canadian dollar has edged higher in the Tuesday session, after three straight losing sessions. Currently, USD/CAD is trading at 1.3231, down 0.14% on the day. On the release front, there are no major U.S. indicators and no Canadian events. On Wednesday, the U.S. releases CPI reports.

Nervousness and uncertainty on the part of investors is never good news for the Canadian dollar, as the minor currency is dependent on risk appetite. With global stock markets seeing red over the past few days, the Canadian currency has fallen out of favor, declining close to 1.0% since Thursday. There are no key Canadian events until Friday, so USD/CAD movement will be largely dictated by U.S. consumer inflation and spending reports during the week.

The Fed shows no signs of easing up on interest rate hikes, with Fed policymakers stating that interest rates will continue to rise until the “neutral rate” of between 2.5 percent and 3.5 percent is reached. This means we can expect rate hikes once a quarter in 2019, barring a sharp downturn in the economy. The policy of gradual increases is good news for the U.S dollar, as higher interest rates means that the greenback is more attractive to investors. The Bank of Canada has taken a page out of the Federal Reserve’s book, saying that its policy of gradual rate hikes will continue into 2019. The BoC will have to continue raising rates if the Canadian dollar is to hold its own against the strong U.S. dollar.

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USD/CAD Fundamentals

Tuesday (November 13)

  • 5:14 US NFIB Small Business Index. Estimate 108.0. Actual 107.4
  • 10:00 US FOMC Member Brainard Speaks
  • 14:00 US Federal Budget Balance. Estimate -116.6B
  • Tentative – US Loan Officer Survey

Wednesday (November 14)

  • 8:30 US CPI. Estimate 0.3%
  • 8:30 US Core CPI. Estimate 0.2%
  • 18:00 US Fed Chair Powell Speaks

*All release times are EST

*Key events are in bold

USD/CAD for Tuesday, November 13, 2018

USD/CAD, November 14 at 8:40 EST

Open: 1.3250 High: 1.3250 Low: 1.3216 Close: 1.3231

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.2970 13099 1.3198 1.3292 1.3383 1.3461

USD/CAD was down slightly in the Asian session and has recovered in European trade.

  • 1.3198 is providing support
  • 1.3292 is the next resistance line
  • Current range: 1.3198 to 1.3292

Further levels in both directions:

  • Below: 1.3198, 1.3099, 1.2970 and 1.2831
  • Above: 1.3292, 1.3383 and 1.3461

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

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.