- The Canadian dollar strengthened on expectations for healthy trade negotiations with the US, while the USD/CAD pair fell.
- Economists expect Canada's economy to grow by 1% in the third quarter of this year.
- The US dollar recovered despite slow trading due to Thanksgiving.
Despite decent recovery moves in the US dollar (USD), the USD/CAD pair fell near psychological support at 1.4000 during European trading hours on Thursday. The loonie pair fell as the Canadian dollar (CAD) strengthened on expectations that Canada would successfully negotiate a trade deal with the United States (US).
canadian dollar price today
The table below shows the percentage change of the Canadian Dollar (CAD) against major currencies today. The Canadian dollar was the strongest against the Japanese yen.
| USD | EUR | GBP | JPY | CAD | australian dollar | new zealand dollar | swiss franc | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.28% | 0.20% | 0.55% | -0.12% | 0.00% | 0.16% | 0.27% | |
| EUR | -0.28% | -0.07% | 0.29% | -0.39% | -0.26% | -0.11% | 0.00% | |
| GBP | -0.20% | 0.07% | 0.35% | -0.31% | -0.18% | -0.04% | 0.08% | |
| JPY | -0.55% | -0.29% | -0.35% | -0.66% | -0.53% | -0.42% | -0.27% | |
| CAD | 0.12% | 0.39% | 0.31% | 0.66% | 0.14% | 0.26% | 0.39% | |
| australian dollar | -0.01% | 0.26% | 0.18% | 0.53% | -0.14% | 0.15% | 0.27% | |
| new zealand dollar | -0.16% | 0.11% | 0.04% | 0.42% | -0.26% | -0.15% | 0.11% | |
| swiss franc | -0.27% | -0.00% | -0.08% | 0.27% | -0.39% | -0.27% | -0.11% |
The heat map shows the percentage change between major currencies. The base currency is selected from the left column and the quote currency is selected from the top row. For example, if you select Canadian Dollars from the left column and move to US Dollars along the horizontal line, the percentage change displayed in the box represents CAD (Basic)/USD (Quote).
US President-elect Donald Trump said in a post on Truth.Social on Monday that he would impose 25% tariffs on Canada and Mexico for providing China with a highway to supply illegal drugs into the US economy. .
Canada is a major supplier of oil, gas, and energy products to the United States. The scenario of higher tariffs on Canada would significantly reduce foreign inflows into the Canadian economy, which would be negative for the Canadian dollar (CAD).
Analysts at Ascendant FX said: “The targeting of both countries suggests that this threat was likely a strategic opening move in renegotiating the existing free trade agreement between the three countries. ” he said.
However, additional tariffs imposed by the Trump administration will have some impact on the Canadian dollar.
This week, investors will focus on Canada's third-quarter gross domestic product (GDP) data, which will be released on Friday. Canada's economy is estimated to have grown 1% compared to the same period a year ago, but slower than the 2.1% growth a year earlier.
Meanwhile, the US dollar index (DXY), which measures the value of the US dollar against six major currencies, rebounded to around 106.40 amid low trading volume due to the US market being closed for Thanksgiving.
The USD index will be influenced by market expectations regarding the Federal Reserve's interest rate policy at its December meeting. There is a 70% chance that the Fed will cut interest rates by 25 basis points next month to 4.25-4.50%, according to the CME FedWatch tool.
Canadian Dollar Frequently Asked Questions
The main factors that move the Canadian dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of oil, Canada's largest export, the health of the economy, inflation, and the balance of trade. The difference between Canada's exports and imports. Other factors include market sentiment, or whether investors are taking on riskier assets (risk-on) or seeking a safe haven (risk-off). Risk-on is Canadian dollar plus. The health of the US economy, our largest trading partner, is also an important factor influencing the Canadian dollar.
The Bank of Canada (BoC) has significant influence on the Canadian dollar by setting the interest rate levels at which banks can lend to each other. This affects interest rate levels for everyone. The BoC's main goal is to keep inflation between 1 and 3 percent by adjusting interest rates up and down. Relatively high interest rates tend to be positive for the Canadian dollar. The Bank of Canada can also use quantitative easing and monetary tightening to influence credit conditions, with the former being CAD negative and the latter CAD positive.
Oil prices are an important factor influencing the value of the Canadian dollar. Oil is Canada's largest export, so oil prices tend to have an immediate impact on the value of the Canadian dollar. Generally, when oil prices rise, the CAD also rises because aggregate demand for the currency increases. The opposite is true if oil prices fall. Higher oil prices tend to increase the likelihood of a positive trade balance, which also supports the Canadian dollar.
Although inflation has traditionally been considered a negative factor for currencies because it reduces the value of money, the opposite is actually true in modern times where cross-border capital controls have been relaxed. Rising inflation rates tend to cause central banks to raise interest rates, which in turn increases capital inflows from global investors looking for lucrative places to store their money. This increases the demand for the local currency (in the case of Canada, the Canadian dollar).
The release of macroeconomic data gauges the health of the economy and can impact the Canadian dollar. Indicators such as GDP, manufacturing and services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian dollar. In addition to attracting more foreign investment, it could prompt the Bank of Canada to raise interest rates, leading to a stronger currency. However, if economic indicators are weak, the CAD may decline.
