Canadian Dollar Forecast: USD/CAD Chasing Oil, CAD Data Key ...| MENAFN.COM

Wednesday, 18 May 2022 03:50 GMT

Canadian Dollar Forecast: USD/CAD Chasing Oil, CAD Data Key for BoC Hike


(MENAFN- DailyFX)

CAD , USD/CAD , Analysis and Talking Points

  • Canadian Data In Focus for Near Term BoC Outlook
  • Canadian Dollar Underpinned by Oil

Canadian Data In Focus for Near Term BoC Outlook

Today will see the first of two major data points that could cement a January rate hike from the Bank of Canada. The BoC Business Outlook Survey, which is a key input for the central bank's assessment of the economy will likely remain. However, a key caveat is that the Q4 survey will likely have captured the period prior the spread of the Omicron variant and subsequent lockdown. That being said, a strong report will be enough to see an increase in tightening bets and thus underpinning the Canadian Dollar. In turn, should a strong report today be followed up with a higher than expected inflation print tomorrow, it will be harder to argue against a January hike. Although, as I have noted before, the aggressive market pricing for 2022 remains a tall order.

Source: Refinitiv, DailyFX

Canadian Dollar Underpinned by Oil

Taking a look at the Canadian Dollar, given the continued rise across the oil complex, the Canadian Dollar is likely to play catch-up and thus another move towards 1.2450 is in sight, should 1.25 give way.

Canadian Dollar vs Brent Crude Futures

Source: Refiniiv

A Helpful Guide to Support and Resistance Trading

MENAFN17012022000076011015ID1103550270


Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.