The CAD Has Fallen behind most of its Main Currency Rivals
The CAD rose to the mid-1.33s last Thursday thanks to the USD's decline and a rise in risk appetite, but a USD recovery on Friday reduced CAD gains to only 0.15% for the week, one of the worst performances in the major currency sector. As a result, the CAD has fallen behind most of its main currency rivals significantly and has lost momentum on major crosses. The notion that the cycle of monetary policy tightening is about to peak is being applied to the CAD in a way that unfairly compares it to the USD. Last year, the CAD benefited from the USD's tailwinds, but this year, given the maturity of North American rate cycle, it seems likely that the CAD will underperform on the crosses.
The Week ahead
This week, there will be a lot of data to sort through. The Bank of Canada's Business Outlook Survey for Q4 will provide information on price and growth predictions, and it is one of today's highlights for Canadian data. On Tuesday, the December CPI report is released, and on Friday, retail sales figures. The headline CPI report for December is predicted to be weak, with a monthly decline of 0.6% and an annual increase of 6.3%. Core prices are anticipated to be quite stable and drop very modestly from November. Markets are still factoring in the possibility of the BoC tightening at the month's conclusion based on firm data from late last year and unexpectedly strong employment growth in December. The Martin Luther King Jr. holiday falls on Monday in the US. A lot of housing data will be released throughout the week, with some of the highlights being the Jan NY and Philly Fed surveys (released on Tuesday and Thursday, respectively), the Dec Retail Sales report (released on Tuesday), and the PPI and IP reports (released on Wednesday). On Wednesday, the Fed's Beige book will be published.
USD/CAD Likely to Remain Rangebound
Since Dec., the CAD has had a tendency to trade at a discount to the projected fair value. Early January price action somewhat reversed that underperformance, but spot gains have left the USD over fair value, which should restrict the potential for further increases. Models predict some downside risk for spot within a 1.3255/1.3575 range for the upcoming week. Given the weak USD tone, the downtrend seems fair, but neither range extreme may be reached without some large data surprises or greater action in the stock market. Observe the USD/CAD trends.
This Week’s Technical Range
Support is located at 1.3270 while resistance is located at 1.3500.
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?
