Canadian Dollar Receives Boost from Optimism Around China’s Economy

Updated:

Checkmark

Invest at least $250 in D2T to gain lifetime access to our VIP Signals

Checkmark

Get early access to Dash 2 Trade’s Presale. Buy the D2T token now

Checkmark

Existing community of 70,000+ traders

Checkmark

Unlocks access to the leading crypto trading analysis, signals and trading tools

Checkmark

As featured in CryptoNews.com, FXEmpire.com, FXStreet.com and more

Checkmark

World class development team backed by Quant developers and VC investors



The Chinese economy’s optimism had a positive impact on the Canadian dollar, giving the commodity currency a big lift. Being a significant global supplier of numerous commodities, the loonie gained traction despite declining crude oil prices. Since then, COVID cases in China have continued to constrain the upside for commodity demand, as we have seen for much of December and now in 2023, and markets stand strong in their cautious approach.

The USD is somewhat firmer against the CAD today, likely as a result of an FOMC minute that was more hawkish than expected. Market reactions were muted at the time of the release since the earlier ISM manufacturing announcement had caused the dollar to weaken.

USD/CAD Prepares for a New Rally and Will Sustain Its Four Days in a Row Winning

US labor data will be the main topic later today (see the economic calendar below), starting with the ADP report (often a subpar indicator of non-farm payrolls (NFP)) and jobless claims. Overall, the labor market in the United States is still tight since there is a labor shortage. In advance of tomorrow’s NFPs, I do not anticipate a significant market response to this data.

Due to the data lag (November), the balance of trade results for November may also receive little attention from a Canadian perspective, but they are still a crucial indicator for the Canadian economy, which has been in a trade surplus since January 2022.

Canadian Housing Numbers Rebound

After dropping to 166,500 in April, Canadian house starts jumped up to 193,500 in May. Housing’s unexpected resiliency was one of several recent near-term data points that have “clearly been less discouraging than was expected even a few weeks ago,” according to a note from RBC.

But in the immediate future, pressure is likely to mount on the loonie’s current three-week winning streak against the US dollar.

 

You can purchase Lucky Block here. Buy LBLOCK

 

  • Broker
  • Benefits
  • Min Deposit
  • Score
  • Visit Broker
  • 20% welcome bonus of upto $10,000
  • Minimum deposit $100
  • Verify your account before the bonus is credited
$100 Min Deposit
9
  • Award-winning Cryptocurrency trading platform
  • 14 Cryptoassets available to invest in
  • FCA & Cysec regulated
$200 Min Deposit
9.8

Highly volatile unregulated investment products. No EU investor protection.

  • Over 100 different financial products
  • Invest from as little as $10
  • Same-day withdrawal is possible
$250 Min Deposit
9.8
  • The Lowest Trading Costs
  • 50% Welcome Bonus
  • Award-winning 24 Hour Support
$200 Min Deposit
9
  • Award-winning Cryptocurrency trading platform
  • $100 minimum deposit,
  • FCA & Cysec regulated
$100 Min Deposit
9.8
  • Fund Moneta Markets account with a minimum of $250
  • Opt in using the form to claim your 50% deposit bonus
$250 Min Deposit
9
Share with other traders!

Azeez Mustapha

Azeez Mustapha is a trading professional, currency analyst, signals strategist, and funds manager with over ten years of experience within the financial field. As a blogger and finance author, he helps investors understand complex financial concepts, improve their investing skills, and learn how to manage their money.