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USD/CAD Price Forecast – Loonie on Bull’s Path as US Crude Oil Price Hits New High’s

Colin First
The pair fails to attract any buying interest amid subdued USD price-action while bullish oil prices support Loonie and contributed towards capping.

The Canadian Dollar was the best performing major on Thursday and continues to move bullish against US Greenback across Asian market hours on Friday boosted by comments from BOC’s Governor Stephen Poloz and a rise in crude oil prices. Amidst the risk of trade wars and their expected adverse impact on investment decisions, Mr. Poloz said that the economy still warrants higher rates. Canadian local government bond yields rose signaling firming hawkish BOC rate hike bets. The USDCAD pair hit as low as 1.32140 on late Asian market hours and is currently trading at 1.3230 price handle seeing 0.14% decreasing in value. Another factor for solid performance of Loonie against US Greenback is news in Reuters that said “Canada will hit back against U.S. tariffs on its steel and aluminum by offering affected companies and workers up to C$800 million ($603 million) in aid”.

USDCAD Lower

Canadian Foreign Minister Chrystia Freeland is expected to make an official announcement on same in the steel city of Hamilton at 11 a.m. ET (1500 GMT) on Friday. According to the source of Reuters “the assistance is to be spread over several years and would be similar to C$867 million five-year package offered to Canadian softwood lumber producers in 2017 after Washington imposed tariffs. That took the form of loans, loan guarantees, commercial financing and support to help firms expand overseas markets. It also included money to help affected workers learn new skills and provided support for work-sharing agreements“. Canada is also expected to impose retaliatory tariffs on C$16.6 billion worth of U.S. exports and Freeland is due to outline exactly which goods will be hit during today’s announcement.

Meanwhile geo-political tension between US & its allies reach new heights over Iranian sanctions which caused WTI Crude Oil price to hit 3½ year high, which served as trigger to initiate CAD’s movement on bull’s path. On release front, CAD investors are focusing on GDP data, Raw Materials Price Index data & BOC Business outlook survey data while US market hours will see release of Dallas Fed PCE data which is one key indicators used by US FED to measure inflation. USDCAD pair is expected to move between 1.3270 and 1.3230 as trading session comes to close for the week.

This article was originally posted on FX Empire

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