The CAD made some progress against the USD last week, although this may have more to do with overall USD weakness than a favorable perception of the CAD. The GBP/USD and EUR/CAD have both gained against the loonie and as the CAD has lost more ground on the crosses. In the coming weeks, we anticipate these crosses to trend somewhat higher (towards 1.40 for EUR/USD and towards 1.60 for the GBP). The Bank of Canada's rate decision fell short of market expectations for a 75 bps increase, as it increased its benchmark policy rate by only 50 bps and sounded a little more cautious about the future direction of policy. The market's perception that the Bank's decision may have set up a similar shift by the Fed, with the Fed indicating that tightening will be geared down to 50bps increments after this week's decision, is reflected in the fact that the CAD did not notably drop versus. Widespread pressure on the CAD will result if the Fed adopts a more hawkish tone, in contrast to the Bank of Canada's more cautious stance.
USD/CAD Technical Analysis
Some technical fundamentals have had an impact on the CAD. First off, there is a waning of the CAD's strong, positive association with US stocks. The correlation is still high at +74%, having reached a top of just over 90% two weeks ago. Spreads and commodities are the only other variables not currently exhibiting any statistically significant relationships with the CAD. Fair value assessments that take into account risk, volatility, spreads, and commodity prices suggest that spot is exactly where it should be. The coming week indicates a slight downside risk for spot within a band of 1.3445/1.3755.
The week ahead
This week is chock full of data. The Canadian calendar is light, but the October Employment Report is important. With the labor market showing some signs of cooling off and the Bank of Canada being cautious about raising rates, Friday is the focus. Thursday sees the release of Sep Trade figures. In the US, we receive a variety of Oct activity indicators, including (final) PMIs, ISM data, and Fed regional surveys. The ADP jobs report and FOMC decision are both scheduled on Wednesday. Factory orders and September Trade figures are due on Thursday. The NFP numbers are released on Friday; the early consensus estimate is +200k. The FOMC is largely anticipated to raise interest rates by 75 basis points, but the focus will be on future rise direction and whether policymakers signal the widely anticipated gentle "pivot" to a slower pace of tightening going forward.
This week’s USD/CAD range will likely be within 1.3450 -1.3750
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.
FAQs
Who can use the MTFX payment service?
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.
Why should I use MTFX and not my own bank?
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.
How do customers send funds to MTFX?
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.
How long does it take MTFX to transfer funds?
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.
Who can use the MTFX payment service?
