USD/CAD Daily Fundamental Forecast – July 19, 2017

The USDCAD pair continues to trade near the lows of the range as the pair consolidates and wait for the next direction. The pair is unlikely to move too much at this point of time though the weakness in the dollar is clearly weighing on the pair. We could probably see the pair moving towards the 1.25 region in the short term and that round figure is likely to lend some support to the pair in the short term.

USDCAD In Tight Consolidation

The US dollar has been on the backfoot all across the board mainly due to the bad economic data from the US over the last several weeks and also due to the political instability and confusion in the US. The powers in the US also seem to be quite happy with the weakness in the dollar as they have not made any attempt so far to talk up the dollar. They have left the dollar at the mercy of the markets and it has been hit left, right and center.

On the other hand, the BOC has been supporting the CAD very well and they have been hawkish about the currency over the past few weeks or so. They have also gone ahead and raised the interest rates as planned and if the data continues to be strong enough, we could probably see more rate hikes in the months to come. With the 2 currencies at the opposite ends of the rate hike spectrum, it is indeed no surprise that the pair is falling and falling hard.

Looking ahead to the rest of the day, we do not have any major news from Canada or the US and so we can safely expect the pair to continue its consolidation and ranging as the market awaits the next direction.