USD/CAD Daily Fundamental Forecast – October 17, 2017

The US dollar gained in strength during the course of trading yesterday and this has helped to push the USDCAD pair through 1.25 and it is now looking towards the highs of its range once again. There has been nothing fundamentally changed as far as the CAD is concerned but it is the dollar that has been gaining in strength across the board which has helped the pair to move higher.

USDCAD Pushes Higher on Strong Dollar

The main reason for the bullishness in the dollar are reports that say that Trump is seriously considering John Taylor for the job of the Fed chair once Yellen departs. Taylor is well known as  hawkish member and he has been advocating rate hikes many times before and if this appointment goes through, then the market believes that more rate hikes are on the way and this has helped the dollar to gain in strength.

The market always tends to move ahead of the news and it has been the case now as well as these are just reports and rumors and nothing has been confirmed as yet. But the traders and investors are not ready to listen to all that and they have gone ahead in buying the dollar and we expect the dollar strength to continue to prevail in the short term. The fact that the pair has been able to rise despite the fact that the oil prices have been moving higher and supporting the CAD in the meantime, does tell a lot about the strength of the dollar.

Looking ahead to the rest of the day, we do not have any major economic data from Canada or the US and so we can expect some consolidation to happen between the 1.25 and 1.26 regions for today and the short term as well.