20 Jan Predictions | Canadian Dollar to US | US Exchange Rate

Predictions | Canadian Dollar to US | US Exchange Rate

Today we saw the Loonie fall farther against the US dollar. This decrease was due to markets being worried about the Bank of Canada lowering or hinting towards lowering the present interest rate. In addition, today Statistics Canada released manufacturing sales numbers which showed a decline by 1.4%, a decline for a second consecutive month.

If you are a currency converter you should look for signs from the Bank of Canada hinting a lower interest rate in the near future. This would result in the Canadian dollar falling further. US investment bank Morgan Stanley has said that they believe there is a one in three chance that the Bank of Canada will cut its interest rates before year’s end.

If you are a currency trader, or are interested in where the Canadian Dollar is headed, look for these signs from the Bank of Canada:

• Reduction in the bank’s inflation forecasts
• Bank of Canada speaks about risks such as the risks associated with housing market, oil industry, and high debt.
• Reduction in GDP forecasts
• Speaking positively about monetary policy, meaning interest rates will stay low or be cut

All these signs above will suggest to money converter a weaker Canadian economy and a weaker Canadian dollar.

Foreign exchange traders can get their hands on the quarterly monetary policy report by the Bank of Canada tomorrow at 10 a.m. ET.

5 year Canada to US Exchange Rate