Market Data 
- The Canadian Dollar gave a lopsided performance on Tuesday.
- Canada labor figures loom ahead on Friday, but data prints remain limited until then.
- After a recovery in market sentiment, the wait for Fed rate cuts continues.
The Canadian Dollar (CAD) gave a mixed performance on Tuesday, rising and falling mostly in step with the broader FX market. The CAD gained ground against the floundering Pound Sterling and eased lower against the recovering Japanese Yen.
Economic data from Canada remains thin through the trading week until Friday’s Canadian labor data dump. CAD traders can expect the Canadian Dollar to continue drifting along with broader market flows in the meantime as investors continue to keep focus hinged on hopes for rate cuts from the Federal Reserve (Fed) in September.
Daily digest market movers: CAD cruises along market lines
- Risk appetite recovered its balance on Tuesday after several days of panicked risk-off flows.
- A flash of investor hope for an “emergency rate cut” from the Fed fizzled after markets took a second look at recent data prints.
- Tuesday’s economic calendar is strictly low-tier, leaving the Canadian Dollar to drift along with the broader market.
- Bank of Canada (BoC) Summary of Deliberations is slated for release on Wednesday, but is not expected to deliver anything new.
- July’s Canadian Unemployment Rate expected to tick higher to 6.5% from 6.4% on Friday.
Canadian Dollar PRICE Today
The table below shows the percentage change of Canadian Dollar (CAD) against listed major currencies today. Canadian Dollar was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.25% | 0.65% | 0.73% | -0.39% | -0.58% | -0.22% | 0.16% | |
| EUR | -0.25% | 0.43% | 0.49% | -0.65% | -0.84% | -0.54% | -0.08% | |
| GBP | -0.65% | -0.43% | 0.06% | -1.05% | -1.26% | -0.95% | -0.55% | |
| JPY | -0.73% | -0.49% | -0.06% | -1.12% | -1.28% | -1.00% | -0.42% | |
| CAD | 0.39% | 0.65% | 1.05% | 1.12% | -0.20% | 0.11% | 0.52% | |
| AUD | 0.58% | 0.84% | 1.26% | 1.28% | 0.20% | 0.32% | 0.72% | |
| NZD | 0.22% | 0.54% | 0.95% | 1.00% | -0.11% | -0.32% | 0.46% | |
| CHF | -0.16% | 0.08% | 0.55% | 0.42% | -0.52% | -0.72% | -0.46% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Canadian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent CAD (base)/USD (quote).
Canadian Dollar technical outlook: USD/CAD heads back below 1.3800
The Canadian Dollar (CAD) rose a steep nine-tenths of one percent against the battered Pound Sterling on Tuesday as the GBP was pummeled across the board, while easing back one-fifth of one percent against the day’s top-performing currency, the Japanese Yen. The Canadian Dollar regained its footing and climbed one-fifth of one percent against the US Dollar as the Greenback eased.
USD/CAD slipped back below 1.3800 on Tuesday, easing back after the pair testing into a fresh peak for 2024 just shy of 1.3950. Price action is falling back into a familiar range, but an uptick in bearish momentum has yet to drag the pair back below near-term technical levels at the 50-day Exponential Moving Average (EMA) at 1.3730.
USD/CAD daily chart
Canadian Dollar FAQs
The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar.
The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive.
The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD.
While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar.
Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.
