Home Daily Commentaries CAD slightly up ahead of Fed meeting

CAD slightly up ahead of Fed meeting

Daily Currency Update

CAD - Canadian DollarThe Canadian dollar climbed higher against the US dollar this morning, after weakening to a four-week low against its US counterpart on Friday. Investor focus shifted to the US Federal Reserve’s two-day policy meeting set to begin on Tuesday and the Fed’s policy announcement on Wednesday. USDCAD was down 0.16% at 1.2134 at the time of writing.Recently, US policymakers have remained steadfast in their stance that inflation rises would be transitory, but some analysts saw last week’s higher-than-expected CPI data as a reason for why the central bank might signal a change in their monetary policy outlook. If there is a change in rhetoric from the Fed this week, it could help strengthen the US dollar and put pressure on CAD.Canadian manufacturing sales fell 2.1% to $57.1 billion in April, according to Statistics Canada. The auto industry continued to be affected by a shortage of semiconductor chips that forced companies to halt or slow production.

Key Movers

With there being no data out for release from the Eurozone this week, focus will likely remain on the comments made by the European Central Bank last week. ECB President Christine Lagarde steered clear of any talk around tapering or increasing rates, which hasn't given the market confidence in the euro moving forward. EURUSD was up 0.16% on the day, trading at 1.2126 at the time of writing. The pound started the week under some pressure after news that the UK was set to delay the end of COVID-19 restrictions on June 21. Some analysts said the date was expected to be pushed back and investors were more focused on economic data. GBPUSD was up 0.07% at 1.4116 at the time of writing. UK monthly GDP and trade balance data both posted positive figures on Friday, but with the cloud of COVID-related sentiment dominating the pound at the moment, this did nothing to support the currency. UK industrial production posted a weak figure of -1.3%. Investors will be watching for the plethora of UK data due for release this week, and how they may play a role in direction for the pound. Employment data is out tomorrow, CPI inflation data on Wednesday and UK retail sales will be released on Thursday. Bank of England Governor Andrew Bailey is also speaking today and tomorrow.

Expected Ranges

  • EUR/CAD: 1.47 - 1.4748 ▼
  • GBP/CAD: 1.7114 - 1.7168 ▼
  • AUD/CAD: 0.9356 - 0.939 ▼
  • USD/CAD: 1.2137 - 1.217 ▼