USD/CAD – 2018 a dismal year for Canadian dollar

I am bearish on the Canadian dollar

Tumultuous equity markets have led to increased risk apprehension, as jittery investors have flocked to safe-haven assets, at the expense of minor currencies like the Canadian dollar. USD/CAD has posted six straight losing weeks. The December slide was punctuated only by the Christmas holidays, with investors taking some time off. The global trade war, which has resulted in more tariffs on Canadian exports, will continue to hamper the Canadian economy. However, this stark situation could quickly change if the U.S. and China come to an agreement on trade issues which have led to tit-for-tat tariffs between the world’s largest two economies.

Another factor weighing on the Canadian currency is the steep decline in oil prices. WTI Crude has fallen to $45 a barrel, plunging some 40% in the past three months. a weakened global economy could mean that oil prices remain depressed for the foreseeable future. If oil prices remain depressed, traders can expect more headwinds for the Canadian dollar, which is a commodity currency.

Open: 1.2579 High: 1.3661 Low: 1.12249 Close: 1.3612

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.