Home » Daily Commentaries » CAD falls despite higher oil prices

CAD falls despite higher oil prices

Friday 28 January, 2022

Daily Currency Update

Demand for the Canadian dollar continued to edge lower against the US dollar as some analysts say the markets may be cautious ahead of the Bank of Canada monetary policy decision in March. The central bank surprised markets on Wednesday by holding its key interest rate, which is at a record low of 0.25%. CAD also struggled against a strengthening USD, as demand for the world's base currency climbed on Thursday, supported by a stellar fourth quarter 2021 GDP release. The advanced reading showed a 6.9% year-over-year increase in US growth, its biggest rise since 1984. USDCAD was sitting at 1.27548 at the time of writing.

Key Movers

GBPUSD rebounded on Friday after coming under pressure from USD strength on Thursday, trading at 1.3418 at the time of writing. GBPEUR was trading just above 1.20 at the time of writing, with some analysts saying that the pair is probably buoyed by market expectations that the Bank of England will choose to hike rates again next Thursday. Chances of a hike being announced by BoE Governor Andrew Bailey are around 80-90%, however the pace of future hikes will likely be key to the pound’s direction as we head towards spring. AUDUSD fell again on Friday as investors appeared content in ignoring the majority of macroeconomic data sets and let US interest rate and Fed policy expectations continue to drive direction. AUDUSD was down 0.52% at 0.69975 at the time of writing.

Expected Ranges

  • EUR/CAD: 1.4158 - 1.4258 ▲
  • GBP/CAD: 1.7008 - 1.7141 ▲
  • AUD/CAD: 0.8914 - 0.8967 ▼
  • USD/CAD: 1.2702 - 1.2795 ▲