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Canadian dollar jumps against softer USD

Monday 30 May, 2022

Daily Currency Update

The Canadian dollar jumped against the US dollar ahead of a widely expected 50-basis-point interest rate hike from the Bank of Canada on Wednesday. USDCAD was down 0.56%, sitting around 1.2655 at the time of writing. Demand for the US dollar continued to slip on Monday after finishing last week in the red for a second week in a row. The US dollar posted losses against all other G10 currencies and has dropped by around 3% from the highs that it experienced at the start of the month. Some analysts are attributing this softer dollar environment to the Federal Reserve's hesitancy for its tightening plans in September. Data last week showed that consumer spending in the US climbed more than expected in April as inflation slowed and consumers boosted purchases of goods and services. The US Dollar Index was down 0.32% trading at 101.35 at the time of writing.

Key Movers

The euro climbed against the dollar on Monday amid a light trading day in the US as stock and bond markets were closed for Memorial Day. Data showed that headline inflation in Germany surged again in May, coming in at 7.9% year-over-year, up from 7.4% in April. EURUSD was up 0.48% around 1.0784 at the time of writing. The pound also benefitted from a softer US dollar on Monday, with GBPUSD sitting around 1.2649 at the time of writing. Some analysts believe that the pair could break through into the 1.27s again in the coming days if the US dollar keeps losing ground against its rivals.

Expected Ranges

  • EUR/CAD: 1.3632 - 1.3677 ▼
  • GBP/CAD: 1.5998 - 1.6084 ▼
  • AUD/CAD: 0.9095 - 0.913 ▲
  • USD/CAD: 1.2651 - 1.2735 ▼