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USD/CAD shoots back up on the Fed – more to come?

The Federal Reserve not only put off a December rate hike but actually placed it firmly on the table. And it’s not too worried about the US nor the global economy.

The Canadian dollar is tumbling down after struggling to recover.

While not being worried about the global economy goes hand in hand with rising oil prices and a stronger Canadian dollar, the strengthening of the US dollar is just overwhelming for the the Canadian dollar.

USD/CAD reached on 1.3280 on some global gloom but the big rebound in oil prices helped it move nearly 200 pips lower and dip below 1.31. The trend is now reversed once again with Dollar/CAD leaping above 1.32.

Will this choppiness continue?

Oil plays a key role. The  black gold recovered nicely despite yet another rise in inventories. These inventories may flow one day and leave too much idle oil in markets. And with Iran coming back online, it’s hard to see Canada’s key export  really rise.

This week we have a double feature of GDP releases. In the US, economists’ expectations  are at a low 1.6% annualized, but this may improve. Why? It is safe to assume that  the Fed had the numbers before its eyes and that the actual outcome is better.

In Canada, we are expecting a recovery after the country contracted in the  first two quarters, entering a shallow recession.

More:  USD/CAD: Inverted H&S Pattern; Levels & Targets – SocGen

USDCAD rises on Fed hawkishness October 28 2015


Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.