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CAD weakens after trade deficit data

Tuesday 8 February, 2022

Daily Currency Update

The Canadian dollar weakened against the US dollar and other major currencies on Tuesday as oil prices fell and data showed that the economy had a surprise trade deficit in December. Imports hit a new record high and exports fell from the previous month. However, some analysts expect an export rebound next month due to surging energy prices in January. USDCAD was up 0.41% trading at 1.27182 at the time of writing.

Key Movers

The euro pulled back slightly against the dollar as USD found some support in US government bond yields, as well as after comments from European Central Bank president Christine Lagarde. Lagarde tried to tamp down interest rate hike expectations in the euro zone which helped boost the currency last week. EURUSD was down 0.21% trading at 1.14170 at the time of writing. The US dollar saw modest gains on Tuesday as the 10-year US Treasury bond yield rose to 1.95% and with investors focused on inflation data set to come out later in the week. The US Labor Department is due to release January’s consumer price index data on Thursday. The data is expected to show that prices rose 0.4% in January, for a 7.2% year-over-year gain. This reading follows last week's upbeat jobs report, which some analysts could contribute to a faster-than-expected timeline for the US Federal Reserve to hike interest rates. The US Dollar Index was up 0.23% at 95.62 at the time of writing.

Expected Ranges

  • EUR/CAD: 1.4454 - 1.1452 ▲
  • GBP/CAD: 1.7136 - 1.7237 ▲
  • AUD/CAD: 0.9016 - 0.9065 ▲
  • USD/CAD: 1.2661 - 1.2717 ▲