Yahoo Finance USD/CAD Daily Fundamental Forecast – October 19, 2017
The USDCAD pair has been weakening over the last 24 hours on the back of general weakness in the dollar and also due to the fact that the oil prices have been holding on to the highs of the range during this period. This has been lending some good support to the CAD and this has in turn helped the pair to turn weaker.
USDCAD Turning Lower
There is also another aspect to this move as the market seems to be pricing in some hawkishness from the BOC next week. Though the BOC Governor Poloz had made it clear that he does not see any timeline for the rate hike, the market continues to believe, based on past history, that the BOC has a lot of hawkishness up its sleeve as yet and if the data continues to be good, then it is likely to hike rates sooner than what they expect. This is why we are seeing the markets begin to price in the hawkishness and this has been helping the USDCAD to move lower.
On the other hand, the incoming data from the US has been choppy and steady at best and this is another reason why the dollar has not been able to string together a series of bullish days in a trend. The dollar has been weak as the market is not yet sure of whether the Fed would be in a position to hike rates in December and the Fed has also not made any specific indications to that effect though some Fed members continue to believe so.
Looking ahead to the rest of the day, we do not have any major economic news from Canada while we have the unemployment claims data from the US. We expect some consolidation to happen between the 1.24 and 1.26 regions and this is likely to continue in the short term through to the beginning of next month.
This article was originally posted on FX Empire
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