The Canadian dollar (CAD) has clambered its way to a 40-month peak against the US dollar (USD) as rising oil prices and solid fundamentals out of Canada push the Loonie higher.
Although tomorrow’s rate statement from the Bank of Canada (BOC) is expected to show a continuation of the nation’s 1.00% interest rate, last week’s European rate hike has at least a few analysts expecting a surprise.
The rising value of the Canadian dollar also suggests a change in rates is needed. Exports out of Canada have demonstrated their decline with last month’s trade balance figures revealing a drop from growth of 3.0B in February, to 0.1B growth in March. Tomorrow’s trade balance may show a surplus increase of 0.6B, but much data out of Canada seems to suggest it will fall short of this figure.
It seems unlikely the BOC will adjust its interest rates tomorrow, but it may be hard pressed not to reveal stronger commentary in its policy statement. Global fundamentals appear to be demanding a shift in monetary policies from most major economies, especially as we approach this weekend’s meeting of the G7, G20 and IMF.
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Greg Holden is the Chief Market Analyst at ForexYard. Greg uses his detailed knowledge of fundamental and technical analysis to provide some of the leading market forecasts in the forex world today. A guest lecturer at forex symposiums and Chief Editor of ForexYard's analysis center, Greg brings highly detailed and easy-to-use market analyses to his clientele. He has been published on ForexYard's Trading Blog and affiliate websites. Greg holds degrees in Political Science and Economics from Missouri State University, as well as a Masters degree in Middle Eastern History.
