usd-cad
The CAD Feeling Weak Despite Lower Canada Trade Deficit
Skerdian Meta•Wednesday, February 28, 2024•2 min read
Trade deficit has been declining in Canada, and today the trend continued, but the CAD to USD rate didn’t reflect much, as USD/CAD trades around 1.3570. There was a surge earlier which sent the price above 1.36, but buyers couldn’t keep this pair above there for too long and now USD/CAD has retreated 30 pips lower.
Canadian Q4 Current Account Report
- Canada’s Q4 current account deficit was reported at -1.62 billion, higher than the expected -1.25 billion. The previous figure was revised to -4.74 billion from -3.22 billion.
- The trade in goods and services balance showed a $1.2 billion surplus in the fourth quarter, a significant change from the third quarter’s deficit of $2.0 billion. Exports of goods increased by $2.9 billion to $195.0 billion, while imports rose by $0.3 billion.
- The investment income balance shifted from a slight deficit in the third quarter to a slight surplus of $112.0 million in the fourth quarter.
- Portfolio investments resulted in a net outflow of funds from the economy amounting to $21.5 billion in the fourth quarter.
- For the entirety of 2023, the current account balance registered a deficit of $17.8 billion, marking an increase of $7.4 billion compared to 2022.
Overall, the data suggests a mixed picture for Canada’s current account, with improvements in trade balances partially offset by shifts in investment income and portfolio investments. Yesterday the Canadian dollar experienced a decline and continued to weaken, which was reflected in the USD/CAD pair, as it kept rising earlier today as well. The pair surpassed the 1.3600 level, reaching as high as 1.3605 before encountering resistance from sellers. Subsequently, a move below the high price from two weeks ago at 1.3585 intensified selling pressure.
As long as USD/CAD remains above the 100-day moving average and the high of the swing area below 1.3545, buyers are expected to maintain control. However, a break below that level could disappoint buyers who entered the market following the upward breakout.
USD/CAD Live Chart
USD/CAD
Skerdian Meta
Lead Analyst
Skerdian Meta Lead Analyst.
Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
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