USDCAD monthly
With two trading days left in October, USD/CAD has a shot at breaking the monthly closing highs in 2016 and 2020. Much of that will depend on key US economic data on Wednesday and Thursday but even if the loonie hangs on, the outlook is worsening in part due to a new housing measure that Canadian opposition policymakers unveiled yesterday.
The key level on a monthly close is 1.4059, which was the March 2020 close but the more-important level is the two-year intraday high of 1.3977, which is withing striking distance in light of the 32 pip rise today.
Today I spoke about why the Canadian dollar is struggling and how it will be affected by the US election in an interview with BNNBloomberg:
Some of the points I touched on:
- The three pillars of 21st century Canadian growth are broken: Resource extraction, housing and population growth
- Harris win might boost CAD; Trump win could harm it through USMCA renegotiation and trade tensions.
- Potential Chinese stimulus could help CAD, but timing and details are uncertain.
- Likely negative outlook: Expected Trump win, weak Chinese stimulus, and Canada's slowing economy suggest further CAD decline.
- Bank of Canada's slow rate cuts may prolong economic weakness and depreciate CAD.
- Political change unlikely to rapidly improve CAD; Conservative housing policies may temporarily suppress the market.
- Strong US dollar from robust economy and anticipated Republican policies adds downward pressure on CAD.