Home Daily Commentaries CAD neutral against the USD      

CAD neutral against the USD      

Tuesday 24 January, 2023

Daily Currency Update

USD/CAD was seen sliding to 1.3350 levels, while bears kept the reins tight. The Canadian dollar was cheered slightly on by the USD’s weakness, but not for long. Being closely watched by the market, the Bank of Canada is set to release its monetary policy decision on Wednesday. Mixed figures of the Canadian housing data published the previous day joined the downbeat US Conference Board’s Leading Index and put a floor under the prices. On a broader front, the absence of Fed policymakers’ talks ahead of the February meeting and the Lunar New Year holidays in China restricts the market moves, as well as limits the USD/CAD pair’s momentum. That said, WTI crude oil pares intraday gains near $81.70 after a softer start to the week. Even so, black gold remains around the seven-week high amid hopes of a China-linked demand. The latest talks surrounding the US readiness to use Special Petroleum Reserves (SPR) should be observed.

Key Movers

The Eurozone’s PMI rose to 50.2 in January from 49.3 in December, this growing number shows a decent rise in the manufacturing and service sectors. This fresh evidence indicates that Europe’s economy could confound expectations and dodge a recession this year. The return to humble growth was aided by tumbling energy costs and an easing of supply chain stress, which helped temper the rising input costs for producers. The UK’s economy on the other hand contracted sharply, the PMI numbers showed a steep decline in the business activity in the last two years. The PMI reading fell to 47.8 in January, from 49 in December, indicating that low consumer confidence depressed activity in the dominant services sector.

Expected Ranges

  • EUR/CAD: 1.4505 - 1.4552 ▼
  • GBP/CAD: 1.641 - 1.6577 ▼
  • AUD/CAD: 0.9368 - 0.9426 ▲
  • USD/CAD: 1.3349 - 1.3406 ▼