Analysts say to watch the Loonie exchange rate in 2017, as CAD currency rate could easily have the largest impact of all possible trends and drivers on the profitability of Canadian agriculture and energy business throughout the year.
Opinions are varied over the next moves made by the new United States administration and the impacts to follow in the Canadian economy. Bank of Canada governor Stephen Poloz told an Edmonton audience on Tuesday that it is too soon to model how trade agreement changes will affect the country, while suggesting it will remain challenging even after the details are known.
Canadian Loonie conversion rate ended the month of January by reaching a 21-week high to the highest level seen since Sept. 9 at $.76965 CAD/USD. A combination of U.S. Dollar exchange rate strength, a slightly higher close in crude oil prices along with Statistics Canada’s report showing real GDP increasing 0.4% for November, the fifth increase reported in six months, helped push the Canadian Dollar currency rate higher.
The monthly chart shows the 235-point move higher in January was the first higher monthly close in four months while the largest monthly move higher seen in nine months.
CAD to USD pair current exchange rate has held above the 200-day moving average at $.76307 for a second day on Wednesday, which has proved a challenge since mid-December.
As well, the close on Tuesday above retracement resistance at $.76736 CAD/USD currency rate, the 50% retracement of the move from the Dollar’s April high to the December low, led to a lower close below this level on Wednesday. This level remains as nearby technical resistance.
The Canadian Dollar currency conversion rate is not indicating the hazard that the Bank of Canada (BOC) may decline interest rates, based on Morgan report.