News & Analyses

Canadian Dollar climbs against Greenback after US PMI miss sparks rate cut hopes

  • Canadian Dollar finds room against softer Greenback post-PMI.
  • Canada Retail Sales due Wednesday ahead of Thursday’s US GDP.
  • Despite PMI gains, CAD upside remains limited as Crude Oil softens further.

The Canadian Dollar (CAD) stepped higher against the US Dollar (USD) after US Purchasing Managers Index (PMI) figures came in softer than expected. Easing US economic activity figures are feeding into market hopes that the US domestic economy will soften enough to encourage the US Federal Reserve (Fed) to move sooner on rate cuts.

Canada releases its latest Retail Sales figures on Wednesday, but the broader market focus will be on the US Gross Domestic Product (GDP) figures due on Thursday. The US Personal Consumption Expenditure (PCE) Price Index will print on Friday. 

Daily digest market movers: Canadian Dollar steps up on softer Greenback

  • US PMIs softened unexpectedly on Tuesday. The S&P Global Manufacturing PMI came in at 49.9, dropping below the 50.0 level for the first time in four months.
  • The Services PMI component also shed weight, printing at 50.9 versus the previous 51.7.
  • Despite a weaker US Dollar, the Canadian Dollar is mixed against the broader major currency boards as declining Crude Oil prices hobble the CAD’s stance.
  • Wednesday’s Canadian Retail Sales for February are expected to recover to 0.1% from the previous month’s -0.3%.
  • Canadian Retail Sales Excluding Automobiles are expected to hold flat at 0.0% compared to January’s 0.5%.
  • US annualized quarterly GDP on Thursday is forecast to tick down to 2.5% from the previous 3.4%.
  • Friday’s US Core PCE Price Index for March is expected to hold steady at 0.3%.
  • According to the CME’s FedWatch Tool, rate markets are pricing in a 70% chance of at least a 25 basis point rate cut from the Fed in September.
  • Read More: US S&P Manufacturing PMI declines to 49.9, Composite PMI falls to 50.9

Canadian Dollar price today

The table below shows the percentage change of Canadian Dollar (CAD) against listed major currencies today. Canadian Dollar was the strongest against the US Dollar.

USD   -0.49% -0.82% -0.28% -0.60% -0.05% -0.38% -0.10%
EUR 0.47%   -0.35% 0.21% -0.10% 0.43% 0.12% 0.36%
GBP 0.82% 0.34%   0.55% 0.24% 0.78% 0.46% 0.72%
CAD 0.28% -0.21% -0.55%   -0.30% 0.22% -0.09% 0.18%
AUD 0.59% 0.10% -0.25% 0.29%   0.54% 0.22% 0.46%
JPY 0.05% -0.43% -0.79% -0.23% -0.55%   -0.31% -0.05%
NZD 0.37% -0.12% -0.47% 0.09% -0.22% 0.31%   0.25%
CHF 0.11% -0.36% -0.73% -0.18% -0.46% 0.06% -0.26%  

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).

Canadian Dollar technical analysis: CAD poised for further gains, but heavy support zone looms

The Canadian Dollar was mixed on Tuesday, gaining around a third of a percent against the US Dollar and a quarter of a percent against the Japanese Yen (JPY). On the downside, the CAD has shed half a percent against the Pound Sterling (GBP).

The USD/CAD slipped below the 1.3700 handle as the Greenback backslides against the Canadian Dollar. The pair hit an intraday support zone near 1.3660, and further down is approaching a significant demand zone near 1.3600. With Tuesday’s downside momentum, the pair is on pace to close in the red for a fifth consecutive trading day.

Major support is currently priced at the 200-day Exponential Moving Average (EMA) just north of the 1.3500 handle. A resurgence of US Dollar buying could drag the USD/CAD back up to the last swing high near 1.3850.

USD/CAD hourly chart

USD/CAD daily chart


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