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CAD dips ahead of Bank of Canada governor’s testimony

Wednesday 2 February, 2022

Daily Currency Update

There was little movement from the Canadian dollar against the US dollar on Wednesday ahead of a testimony from Bank of Canada governor Tiff Macklem at 3 p.m. eastern. However, CAD did edge lower against GBP and EUR at the time of writing. GBPCAD was up 0.32% trading at 1.72086, while EURCAD was up 0.27%  sitting at 1.43372. The US dollar on the other hand continued to edge lower against its major peers following the release of disappointing non-farm employment numbers.

Key Movers

ADP data —  which provides an early look at employment growth and is released two days before the final monthly report from the US Bureau of Labor Statistics — showed that private employment in the US fell by 301,000 in December 2021. Economists had expected an increase of 207,000 private sector jobs. Some analysts say this weaker than expected report could prompt economists to revise down the official number on Friday which could add pressure to the US dollar. The pound climbed against the US dollar on Wednesday before a Bank of England meeting on Thursday where policymakers are widely expected to raise interest rates. GBPUSD was up 0.33% trading at 1.3565 at the time of writing. The euro was also higher against the dollar ahead of a European Central Bank meeting on Thursday. EURUSD was up 0.21% sitting at 1.2967 at the time of writing. It is likely the combined forces of the BoE potentially hiking rates, and the ECB remaining cautious, may put some pressure on GBP/EUR and we could see demand for the pair rise.

Expected Ranges

  • EUR/CAD: 1.4259 - 1.4356 ▲
  • GBP/CAD: 1.7134 - 1.7229 ▲
  • AUD/CAD: 0.9018 - 0.9074 ▼
  • USD/CAD: 1.2653 - 1.2702 ▲