Last week's week saw a strengthening of the CAD against the USD. US employment figures were less than anticipated but in line with predictions. Data on average hourly earnings for December suggest that Fed policymakers, who have been worried that the tight labor market is causing inflation, should be less concerned. Canada, on the other hand, posted astronomical employment figures (+104k in December) and a decrease in the jobless rate. The market is pricing in a 25 bps hike at the end of the month with a probability of about 75%, despite pricing reflecting some easing of Fed rate hike expectations for the month of February.
In the coming week, slower US wage growth may make the likelihood of a 1/4-point raise by the FOMC in early February more obvious. At the end of the month, BoC policymakers will have to take into account growing core inflation, high wages, and tight labour markets, increasing the possibility that they will raise interest rates by 1/4 of a point. A flat to slightly lower trading range between 1.3375 and 1.3695 is predicted by weekly models for the upcoming week. Although the bottom end of that range is unattainable without a major increase in risk appetite, the upper zone of that range appears to be solid.
This week, there aren't many noteworthy economic reports from Canada. The domestic housing market's downturn should be reflected in both building permits and existing home sales. Headline prices are expected to remain unchanged in the month, clipping the y/y pace of growth to 6.6% (from 7.1% in Nov). Headline prices are expected to remain unchanged in the month, clipping the y/y pace of growth to 6.6% (from 7.1% in Nov). Flat headline prices in Dec should set CPI up for a further deceleration in the next few months. A soft CPI print will be a plus for the CAD and a negative for the USD. There are a number of Fed speakers this week as well.
The current expected trading range for the week 1.3375 -1.3695.
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.
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.