Canadian dollar making gains as BoC announcement looms this Week
Monday 23 January, 2023
Daily Currency UpdateThe CAD is up slightly against its US counterpart as oil makes gains and stock markets indicate a positive open. The benchmark WTI oil price has reached over $82 a barrel, with all the North American exchanges seeing futures trade up before the markets open. Wednesday morning will see the biggest highlight for the Canadian dollar this week with the Bank of Canada’s rate announcement. The central bank is expected to hike rates a further 0.25%.
Key MoversThe USD is starting the week down as a slowing pace of rate hikes from the FOMC becomes increasingly likely. This may have been amplified in the overnight markets as trading in Asia will be thinner than normal due to the Lunar New Year. The USD Index (DXY) is just above the May low of 101.30 but a break below that could see a move to an April low of 99.42. The week ahead is slow for data with the highlights being December’s Durable Goods Orders on Thursday and the PCE inflation index on Friday. While many Asian markets are closed this week due to the Lunar New Year, Australia is only closing on Thursday. Trading on the AUD saw an improvement in the overnights, as a higher than expected 7.5% inflation print caused investors to believe that the RBA might be more aggressive with its next rate announcement. With no significant data in European markets the GBP and Euro are both making slight gains as inflation rates point towards further rate hikes. This is in addition to the Fed being expected to have only 2 more hikes before standing firm.
- EUR/CAD: 1.4523 - 1.4595 ▲
- GBP/CAD: 1.6511 - 1.6638 ▲
- AUD/CAD: 0.9322 - 0.9367 ▼
- USD/CAD: 1.3347 - 1.3388 ▼