Don’t waste your time – keep track of how NFP affects the US dollar!

Data collection notice

FBS maintains a record of your data to run this website. By pressing the “Accept” button, you agree to our Privacy policy.

Join the Facebook community of FBS!

Beginner Forex book

Beginner Forex book will guide you through the world of trading.

Email tooltip

Thank you!

We've emailed a special link to your e-mail.
Click the link to confirm your address and get Beginner Forex book for free.

FBS Mobile Personal Area

FREE

View
CAD: BOC meeting and oil prices

CAD: BOC meeting and oil prices

Information is not investment advice

To trade the Canadian dollar these days, you will need to have the info about the key fundamentals which are driving it: the upcoming Bank of Canada’s meeting (BOC) and the outlook for oil prices. 

Bank of Canada will maintain its current policy

The Bank of Canada will meet on Wednesday, July 10. According to the consensus forecast, it will keep the Overnight Rate at 1.75%.

Canadian economic picture is mixed. On the one hand, the Ivey PMI fell in June to the 4-month low of 52.4 from 55.9 in May; the nation’s economy lost 2,200 jobs last month; retail sales growth dramatically slowed down in April from (1.8% to 0.1%).

PMI.png

On the other hand, Canadian GDP growth beat expectations in April (0.3% vs. 0.2%), following a 0.5% increase in March. Wages continued to rise, and the trade balance showed a surplus. 

Given the concerns about the global economy, the overall risks are that the situation will develop in a negative way. Yet, for now, Canada is in a better position than many other developed economies and this gives the CAD an edge. Although the expectations of the US Federal Reserve’s rate cuts will diminish after the stronger-than-expected NFP released on Friday, the Fed will still need to support the American economy. As a result, the odds are that USD/CAD will remain in a downtrend.

Notice that the BOC won’t be the only market mover for the pair: the FOMC meeting minutes will be out on July 10, the Fed’s Chair Powell will testify on July 9 and 11. 

Oil doesn’t want to give up

The picture for crude oil is more or less favorable and this is a good piece of news for the CAD.    

In June, OPEC’s crude oil production fell to the lowest level since April 2014 of 29.60 million bpd. It happened as cartel members Iran and Venezuela are hit by the US sanctions. The Organization of the Petroleum Exporting Countries agreed to extend oil production cuts by nine months, into Q1, 2020. As you probably know, the smaller the supply, the better for the price.

In addition, Middle East tensions represent a powerful engine for oil prices. The latest development was that Iran threatened to capture a British ship after British forces seized an Iranian tanker in Gibraltar over accusations the ship was violating EU sanctions on Syria. The conflict can escalate further. 

WTI.png

That doesn’t, of course, mean that oil prices will take off and rocket sky-high. The main obstacle on the way of that is created by the concerns about the global demand. This is a serious factor that will cap oil limiting its recovery. As a result, the oil market can support the CAD, but it’s unlikely to give it strong fuel. 

Conclusion

The CAD has decent chances to strengthen versus currencies the JPY, the EUR, the GBP. It may also retain a positive trend versus the USD. 

Similar

How to trade on OPEC meeting?

The world’s largest oil exporters, OPEC+ nations, will meet on Tuesday. The meeting is expected to start at 15:30 GMT+3.  

Popular

Gold: short-term trade ideas

Everyone is interested in trading gold (XAU/USD). The meeting of the Federal Reserve at 21:00 MT time (GMT+3) will certainly drive the price.

Choose your payment system

Learn more

Callback

Please fill in the form below so we can contact you

Select the best time for us to call you. We give calls from Monday to Friday in suggested intervals. In case we couldn't get through, we will try again at the same time the next day. For getting real-time assistance, use FBS chat.

We provide only English-speaking callbacks. If you prefer any other languages, contact the support team.

We will call you at the time interval that you chose

Change number

Your request is accepted.

We will call you at the time interval that you chose

Next callback request for this phone number will be available in 00:30:00

If you have an urgent issue please contact us via
Live chat

Internal error. Please try again later