USD/CAD Daily Fundamental Forecast – February 20, 2017

USDCAD continues to range and consolidate just like many of the other currency pairs. Most of the pairs seem to be in a consolidation mode as there is no specific trend pulling or pushing them in any specific direction. It is only the size of the range that varies from pair to pair but it doesn’t take away the fact that the pairs have been ranging for quite some time now. The market is yet to fully make up its mind on what Trump and his team is upto for the next 4 years and that is the reason for the uncertainty and the ranging.

Canada is expected to bear the brunt of Trump’s policies as it is a close neighbour of the US and has lot of trade relations with the US. With the crux of the thrust from Trump so far, being in the immigration and economic policies, it is likely that Canada is going to suffer a great deal from the changes in the policy and this could affect them in the medium and long term as well.

Though the relations between the 2 leaders from either side have been cordial so far, it remains to be seen how long this can last and when the next salvo will be fired and from which side. It is this uncertainty and risk that is keep both the currencies on tenterhooks and this is one of the main reasons for the consolidation that we have been witnessing. The bulls are also under pressure due to the high oil prices and the strong economic data from Canada which is helping the CAD.

USD/CAD the Week Ahead

Looking ahead to today, we do not have any major news from Canada and it is a holiday in the US and hence we can safely expect some more consolidation and ranging in this pair for today.