USD/CAD: Pair Remains Within Familiar Range, Investors Look To FOMC

The US dollar slipped slightly lower versus its Canadian counterpart in the previous session. The US dollar Canadian dollar exchange declined 0.1% on Monday, closing at 1.3238, slightly up from the session low of 1.3221. The pair is edging lower in early trade on Tuesday, though continues to trade within a familiar range.

The US dollar edged lower at the start of the trading week, although volatility was limited owing to the absence of any relevant macroeconomic data and amid ongoing tensions between the US and China.

With no economic data due today, trading is expected to remain subdued as investors look ahead to Wednesday’s Federal Reserve monetary policy announcement. After three interest rate cuts across the year, the broad expectation is that the Fed will remain on hold this week as officials consider that they have done enough to stabilise the US economy. Instead investors will look at the dot plot for further clues as to where policy makes see monetary policy going across 2020. Currently the dot plot suggests the next move by the Fed will be a hike in 2021.

Canadian Dollar Struggles As Oil Fails To Break $59

The Canadian dollar managed to advance versus the greenback despite weak housing data and a fall in the price of oil. West Texas Intermediate struggled to push beyond $59 on Monday. The strong NFP data last week and the OPEC cuts helped boost the price of oil at the end of last week. However, weak Chinese export data on Monday raised fears over the health of the world’s second largest economy, and the demand outlook for oil. This dragged oil lower. Usually the commodity sensitive Canadian dollar falls when the price of oil declines.

Canadian housing data was also weaker than forecast. Housing starts fell by more than expected in November, although managed to remain above 200,000 for the 6^th straight month. On a historical basis this is an elevated level.

There is no Canadian economic data due to be released today. Investors will follow trade headline and oil prices for direction.

Currencylive.com is a news site only and not a currency trading platform.

Currencylive.com is a site operated by TransferWise Inc. (“We”, “Us”), a Delaware Corporation. We do not guarantee that the website will operate in an uninterrupted or error-free manner or is free of viruses or other harmful components. The content on our site is provided for general information only and is not intended as an exhaustive treatment of its subject. We expressly disclaim any contractual or fiduciary relationship with you on the basis of the content of our site, any you may not rely thereon for any purpose. You should consult with qualified professionals or specialists before taking, or refraining from, any action on the basis of the content on our site. Although we make reasonable efforts to update the information on our site, we make no representations, warranties or guarantees, whether express or implied, that the content on our site is accurate, complete or up to date, and DISCLAIM ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Some of the content posted on this site has been commissioned by Us, but is the work of independent contractors. These contractors are not employees, workers, agents or partners of TransferWise and they do not hold themselves out as one. The information and content posted by these independent contractors have not been verified or approved by Us. The views expressed by these independent contractors on currencylive.com do not represent our views.