Sticky Registration Sticky Customer Support

Weekly Currency Update

Get access to our expert weekly market analysis and discover and track your currency pair using our exchange rate tools.

BoC looks poised to raise interest rates by 50bps this week

Weekly Currency Update 11 04 22
  • USD/CAD ended the week around 1.2570, which is disappointing from a CAD-bullish standpoint after reaching levels near 1.24 in the middle of the week, and plainly leaves the CAD exposed to more weakening. Given what looks to be a good backdrop for the CAD, this seems a little unusual. After a 336k increase in February, the March jobs statistics showed a gain of 72.5k, which was close to the 80k consensus. Full-time jobs increased by 93k. The unemployment rate in Canada fell to 5.4 percent, a new low (since 1976). Wages increased (3.7 percent Y/Y) and hours worked increased 1.3 percent in the month, indicating that the economy is still moving upward. As policymakers respond to tight labour markets, increasing wages, and above-target inflation, the statistics support the idea of the Bank of Canada hiking the Overnight Target Rate by 50 basis points this week and opening the door to future 50 basis point raises in the months ahead.

What’s wrong with loonie?

  • So, what's wrong with the CAD, and why is it losing ground against the US dollar? Broader market volatility has increased slightly, but the CAD's performance in March was still hampered by it. Oil prices have fallen slightly but remain high, and while Canada's terms of trade have weakened slightly since the peak in March when crude oil prices soared, they remain quite favorable (multi-year highs). The fundamental problem appears to be the dollar's broader gain in the face of rising US yields. We note that Fair Value models imply an equilibrium near 1.2650, which suggests that underlying risks for the CAD against the USD are marginal to the downside in the short term. Observe the foreign exchange rates.

The week ahead

  • The main focus for the CAD this week is the Bank of Canada's policy announcement, with all major Canadian bank analysts expecting a 50 basis point hike. Expect a hawkish undertone in the policy statement, MPR, and Governor Macklem's news conference, which will boost the CAD widely. However, there's a chance that policymakers will either a) fail to deliver what's already priced in or b) provide insufficiently aggressive guidance. Furthermore, high-profile US data measures such as the CPI, PPI, and Retail Sales are likely to show significant growth in March. Inflation is predicted to hit a new cycle high this year, with the CPI rising to 8.4 percent and the PPI rising to 10.6 percent. The dollar will be supported by strong US statistics.
  • This week’s currency range is quite wide given the significant risk factors – USD/CAD trading range (1.2350 – 1.2650).

Currency Chart

Get access to our market experts and sign up to receive the latest updates on any currency with our real-time exchange rate reports.

Sign up to receive the latest market news from our experts.

Daily Currency Updates
Daily Market Analysis
Get daily intelligence and currency reports directly to your inbox.
Weekly FX Technical Analysis
Weekly Technical Analysis
Get our weekly technical analysis providing valuable insights.
Monthly Currency Outlook
Monthly Currency Outlook
Receive our monthly currency report and help improve your forecasts.

By entering your email address you agree to the MTFX Terms Of Use and MTFX Privacy Policy and agree and agree to receive sales and marketing communications. Unsubscribe at anytime.

FAQs

Individuals and businesses who need to send money in foreign currency internationally can use MTFX’s services. The beneficiary of the transfer must have a bank account for the funds to be paid into. Personal clients usually use our services to transfer money between their own accounts in two different countries. Business clients usually use our services to transfer funds to suppliers, fund international operations, or repatriate overseas earnings.
MTFX offers currency exchange rates that are 2-5% better than those offered by the banks. Personal clients usually save hundreds of dollars per transfer and for larger transfers, the savings can run into the thousands. We also offer excellent customer service, dedicated currency specialists, and a 24/7 online platform with best-in-class technology that allows you to complete transfers from any device virtually anywhere in the world. Business customers save with better currency exchange rates and proven solutions geared towards managing and mitigating foreign exchange risk. Our solutions include forward contracts, market orders, rate alert services, and much more - all backed by great technology and great people.
Funds can be transferred via wire transfer, Electronic Funds Transfer (EFT), or ACH payment services. MTFX maintains bank accounts in all major currencies with highly-rated banks. Our banking infrastructure ensures that you can transfer funds to us quickly and securely.
Our global network of banking partners allows us to get funds to virtually anywhere in the world quickly and efficiently. Most wire transfers from MTFX will be received by your beneficiary within 24-48 hours. MTFX also offers same-day transfers that are almost instantaneous, as well as low-cost in-country payment services for your less urgent transfers. For further information please speak to one of our currency specialists.