Canadian Dollar Forecast:
- The Bank of Canada’s recent dovish-shift seemingly remains the driving force behind the Canadian Dollar[1]’s weakness
- Therefore, a flurry of encouraging fundamental factors may be required to rebuke the prospect of lower rates
- Upcoming CAD CPI data, a speech from Governor Poloz[2] and the price of crude oil[3] will all be important themes to watch for the Canadian Dollar
Canadian Dollar Forecast: USD/CAD, CAD/JPY, NZD/CAD Levels
After enjoying a relatively robust performance in the first ten months of the year, the Canadian Dollar has recently conducted an about-face and slipped against its major counterparts. The maneuver occurred at the Bank of Canada’s rate decision on October 30[4], where BOC Governor Poloz outlined the case for potential rate cuts. Since the decision was somewhat unexpected, or perhaps just sooner than expected, the Canadian Dollar slipped significantly, and the longer-term outlook may have shifted in lockstep.
Canadian Dollar in the Year-to-Date
With that in mind, pairs like USD/CAD[5], CAD/JPY[6] and NZD/CAD[7] have undergone significant shifts in momentum and each looks to threaten longer-term technical levels as traders look to discover the appropriate value for the Canadian Dollar given the central bank’s expected policy path. Similarly, upcoming economic data like Canadian CPI and a speech from Governor Poloz could provide the spark necessary to break the various technical barriers on each pair or confirm that the currency’s longer-term bullish trend remains intact.
Canadian Dollar Performance Since October Policy Shift
USD/CAD Forecast and Levels to Watch
Turning to USD[8]/CAD, recent price action reveals a steady climb in November – despite the more tepid performance of the broader Dollar Basket (DXY[9]). Consequently, the
