CAD rises against USD again
Daily Currency Update
Demand for the Canadian dollar rose against the US dollar again on Monday, adding to last week's rally as oil prices held on to recent highs and data showed that the economy strengthened in the last quarter of 2021 despite the spread of the COVID-19 Omicron variant. USDCAD was down 0.24%, trading around 1.2518 at the time of writing.Oil prices steadied near a two-month high as the market tightened from lower supply and growing demand due to easing concerns about Omicron's impact. Factory sales rose 2.6% in November from the previous month, driven by sales of primary metals and energy products according to Statistics Canada.
The Bank of Canada released its quarterly Business Outlook Survey on Monday which included widespread challenges with supply chains and labour shortages experienced by Canadian businesses. This further adds to expectations that the Bank of Canada could hike interest rates as early as next week to fight inflation, which would be a boon for the Canadian dollar.
Key Movers
Employment and inflation data from the UK will be in focus this week, as investors digest the data ahead of a Bank of England meeting next month where the central bank is widely expected to raise interest rates. A high inflation reading could further support the chance of a BoE rate hike in February, leading to investor confidence in the pound. The euro could also see movement as German ZEW economic sentiment, Euro zone consumer confidence figures and minutes of the European Central Bank's December policy meeting are all due this week. The Australian dollar also looks to China for direction with Chinese GDP figures set to take center stage.Expected Ranges
- EUR/CAD: 1.4256 - 1.4328 ▼
- GBP/CAD: 1.7068 - 1.7164 ▼
- AUD/CAD: 0.9023 - 0.9058 ▲
- USD/CAD: 1.2502 - 1.2556 ▼