On Friday, USDCAD will focus on job data from the US and Canadian economies.
USDCAD – Daily Chart
USDCAD found resistance at the 1.36 level and has since fallen to 1.3506 with some uptrend support. After the recent failure above, the market may look to test the 1.34 level.
The Canadian dollar also has Balance of Trade figures ahead on Thursday evening with an expected C$0.8 billion versus the previous C$0.5 billion.
Last week, the country failed to reach a two-way trade deal with the United Kingdom. This is expected to add tariffs on cheese, beef, and cars. In 2023, the industry was worth £700 million in exports to Canada. However, costs will now be passed on to Canadian businesses and consumers.
Canada’s GDP growth rate still lags the US by a large margin, with the US seeing 3.4% growth against Canada’s 0.2%. However, there may be some slowing for the US.
Citadel billionaire hedge fund founder Ken Griffin said: “Economic growth is likely to be modest, staying below potential in the upcoming quarters, with the central bank persisting in its fight against inflationary pressures”.
Investors are betting that US interest rates will remain significantly higher than the Federal Reserve’s estimates by the end of the coming rate-cut cycle.
Jan Hatzius, chief economist at Goldman Sachs, predicted the Fed’s so-called terminal rate would be between 3.25% and 3.5% and that the Fed had “a little bit of status quo bias.” While the Fed has been moving up long-term rate forecasts, it has been moving up “more gradually than I would have predicted,” Hatzius said.
Canada’s dollar continues to benefit from more substantial oil prices, with US crude hitting $86.70 on Thursday. Supply concerns have helped oil maintain a healthy winning streak over the last week. Continued Ukrainian attacks on Russian oil refineries have been another issue helping to push oil prices higher. A stronger employment number could help strengthen the CAD after Friday’s report.
