⚡Crypto Alert : Altcoins are up 28% in just last month! Unlock gains and start trading now - Click Here

USD/CAD trading below 1.35 today

BOC Adds Another Reason for the CAD to Rally, After Oil Output Cut

Posted Monday, April 3, 2023 by
Skerdian Meta • 1 min read

Early this morning, the USD was continuing the advance that we saw last Friday and the CAD was slightly weaker against the USD, but it was stronger than most of the other main currencies, which was a bullish sign. This was due to the surprise announcement by Oil producing nations of a production cut, which is expected to have a significant impact on global economy, especially those countries struggling with high inflation such as Europe and the US.

The CAD has benefited from the rise in Oil prices, which are positively correlated to this currency. Now, as the odds for further FED rate hikes beyond May have diminished, as inflation slows, as shown by the softer PCE price index on Friday and lower ISM manufacturing prices earlier today. Besides that, the Bank of Canada survey is showing recession fears for 2023 diminish in Canada, which is giving the CAD another push, sending USD/CAD lower.

Bank of Canada Business Outlook Survey Data

  • Firms see sales growth but recession fears ebb
  • About half of firms expect Canada to be in a recession over the next year, down from two-thirds in Q4 survey
  • For 5th consecutive quarter, firms expect sales growth to slow; slowdown follows period of excessive strength
  • Overall business conditions indicator -1.1% vs -0.06% prior
  • 59% of firms expect inflation to be well above 2% until at least 2025
  • Surveys conducted before global banking stress
  • Firms continue to see labor market as tight
  • 1-year consumer inflation expectations 6.03% vs 7.18% in Q4
  • 2-year inflation to 4.27% vs 5.14%
  • 5-year inflation 2.92% vs 3.10%

The Bank of Canada (BOC) should feel positive about the trend of inflation expectations. There is no apparent reason for them to alter their position.

USD/CAD Live Chart

USD/CAD
Check out our free forex signals
Follow the top economic events on FX Leaders economic calendar
Trade better, discover more Forex Trading Strategies
Related Articles
Comments
0 0 votes
Article Rating
Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments