Canadian dollar reaches two-month high as stock prices increase.
Thursday 26 January, 2023
Daily Currency UpdateThe Canadian dollar reached its highest level in over two months against the US dollar as stock markets increased and following the Bank of Canada rejecting claims that it would soon lower interest rates. Month over month wholesale for Canada are scheduled to be released later today. USD/CAD plunged from 1.34020 and has been trading around the 1.33510 area. WTI currently trades around 81.200.
Key MoversThe US Bureau of Economic Analysis' (BEA) revealed that GDP in the US increased by 2.9% on an annualized basis in Q4. The reading exceeded the market expectation of 2.6% and followed the 3.2% recorded in the previous quarter. The US Department of Labor (DOL) released data on Thursday showing that there were 186,000 initial jobless claims in the week ending January 21. This was an improvement from the previous week's 192,000 and beat market predictions of 205,000. The US Census Bureau announced on Thursday that durable goods orders in the United States rose 5.6%, or $15.3 billion, to a total of $286.9 billion in December. This reading followed November's 1.7% contraction and beat market expectations for a 2.5% increase. The dollar index is showing strength supported by the release of positive economic data as it trades above the 101.830 mark. Investors anticipate that the Federal Reserve will pursue less aggressive policy tightening measures. Despite recent evidence suggesting the economy remains resilient, concerns of a US recession looming on the horizon persist. With no high tier economic data being released today in the Eurozone or the UK. The main driver affecting EUR USD and GBP USD today were the release of US economic data. EUR/USD declined below 1.09000. Next week will see the ECB meeting and is expected to raise its key rate by half a percentage point. GBP/USD falls below 1.24000. The BoE will meet next week for the first time this year. Traders are anticipating a half-point increase in interest rates to 4.00%, which would be the most since late 2008.
- EUR/CAD: 1.4638 - 1.4517 ▼
- GBP/CAD: 1.6631 - 1.6520 ▼
- AUD/CAD: 0.9541 - 0.9484 ▼
- USD/CAD: 1.3424 - 1.3307 ▼