What’s Driving the Bullishness in the Canadian Dollar? - Forex News by FX Leaders
USD/CAD - US dollar vs. Canadian dollar

What’s Driving the Bullishness in the Canadian Dollar?

Posted Friday, December 6, 2019 by
Arslan Butt • 1 min read

Ahead of the release of employment reports from both Canada and the US, the Canadian dollar is trading close to a one-month high against the US dollar, boosted by the BOC’s recent hawkishness and by a weakness in the USD. At the time of writing, USD/CAD is trading at around 1.318.

Earlier this week, the Bank of Canada (BOC) decided to hold its interest rates steady at 1.75% and expressed optimism regarding the state of the Canadian economy, supporting the CAD. The BOC’s recent statements have reduced the likelihood of a rate cut at its next meeting in January from 20% to less than 10% for now, as a result.

The Canadian dollar has also strengthened following the bullishness in crude oil prices recently. The CAD and crude oil share a positive correlation as oil is one of the key exports from Canada, and oil has been making gains after the OPEC agreed to enforce additional supply cuts starting early next year.

In more positive developments for the Canadian economy, Canada’s trade deficit narrowed to CAD 1.08 billion as a result of rise in imports as well as exports. Meanwhile, Canada’s Ivey PMI surged to a three-month high of 60.0 in November from 48.2 in the previous month, boosted by higher inventories and supplier deliveries.

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About the author

Arslan Butt // Index & Commodity Analyst
Arslan Butt is our Lead Commodities and Indices Analyst. Arslan is a professional market analyst and day trader. He holds an MBA in Behavioral Finance and is working towards his Ph.D. Before joining FX Leaders Arslan served as a senior analyst in a major brokerage firm. Arslan is also an experienced instructor and public speaker.
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