USDCAD Analysis – January 10-2024

USDCAD Analysis - January 10-2024

The USDCAD is trading at about 1.34, hitting its lowest point in four weeks. This drop is mainly due to the strength of the US dollar and the instability of crude oil prices, which often influence the value of Canada’s currency, known as the loonie. Crude oil prices have fluctuated because of two conflicting factors: lower demand and worries about supply. This uncertainty affects the amount of foreign money coming into Canada.

Canada’s recent performance in terms of trade hasn’t been as strong as expected. The trade balance measuring the difference between Canada’s exports and imports was only C$1.57 billion. This is a significant drop from the previous month’s C$3.2 billion surplus. The main reason for this decline is increased imports, meaning Canada spends more on foreign goods. This leads to more Canadian dollars leaving the country, which doesn’t help the loonie’s value.

USDCAD Analysis - January 10-2024

USDCAD Analysis

Investors are also closely watching US inflation data, which is expected to be released on Thursday. This data could explain when the US Federal Reserve might cut interest rates. Such decisions can affect currency values, influencing investment flows and economic strength. If US inflation is high, it might delay rate cuts, further strengthening the US dollar against the Canadian dollar.