CAD edges higher
Monday 1 November, 2021
Daily Currency Update
CAD - Canadian Dollar
The Canadian dollar edged higher against the US dollar on Monday morning ahead of this week’s US Federal Reserve policy meeting. USDCAD was down 0.22%, trading around 1.2362 at the time of writing.
The US dollar was one of the strongest performing currencies last week, strengthening significantly against the pound and the euro on Friday.
Monetary policy will be a big focus this week in the US, Australia and the UK so there may be volatility in currency markets in the upcoming days. The Fed is widely expected to announce a reduction of its emergency stimulus on Wednesday.
Key MoversGerman retail sales posted a significantly worse reading than expected, pouring cold water on the market's expectations that the European Central Bank may also have to act later this month to stem the tide of inflation.
Eurozone GDP returned to pre-pandemic levels, posting a 2.2% reading for Q3 last week. October's inflation in the Eurozone also rose to 4.1%. The market continues to monitor if it believes it is the right time for the ECB to act, and if it does, this expectation may drive the euro higher in the coming weeks. EURUSD was up 0.20% at around 1.5836 at the time of writing.
The pound is dominated in similar fashion by speculation around what the Bank of England will do come its rate announcement on Thursday. A number of key investment banks are expecting a rate hike this week - JPMorgan, Deutsche Bank, Morgan Stanley and Santander. This could normally be deemed positive for the currency, but the market is watching closely for signs of what Bank of England Governor Andrew Bailey may do and whether what is done will be enough to start stemming the rise in inflation. GBPUSD was trading around 1.3682 at the time of writing.
- EUR/CAD: 1.4301 - 1.4339 ▲
- GBP/CAD: 1.6889 - 1.6958 ▲
- AUD/CAD: 0.9283 - 0.9314 ▲
- USD/CAD: 1.236 - 1.2401 ▼