The USD/CAD exchange rate declined 120 points in the last week. The USD to CAD converter rate closed the week at 1.3127. The last week was quite busy with several releases of CPI, retail sales, and the benchmark interest rate. In North America, retail sales remained mixed, but the latest Federal Reserve’s meeting minutes have generated strong optimism over the potential hike in interest rate.
USD to CAD currency rate opened the last week around 1.3248. During the last week, the USD to CAD pair surged to a high of 1.3307, but remained incapable to consolidate at this level and dipped to a level of 1.3096. The USD to Loonie conversion rate closed the last week around at 1.3127.
Over the last couple of weeks, Loonie exchange rate gained a lot of strength amid improving crude oil prices, which surged almost 15% since OPEC members announced a deal to ease the global oil glut by cutting their production level to 32.5 million barrels a day from 33.6 million barrels a day.
Russia also provided an optimistic outlook for production supplies and promised to cut their supplies in order to provide a further support to oil prices. Canadian loonie to USD exchange rate is highly dependent on crude oil prices.
In this week, the Canadian Dollar currency rate could make major movements as the Bank of Canada Rate announcement on its interest rate policy is due on Wednesday.
The 2Y U.S.-Canada yield spread seems to have calmed around 25bpts and oil prices are standing just above $50/bbl, leaving CAD currency coverter rate range bound.
Eric Theoret in a brief to Scotiabank clients “The Fed narrative remains key, as markets have yet to fully price the likelihood of a December rate hike. We look to further Canadian Dollar exchange rate weakness on the basis of the broader USD’s trajectory into year-end.”