Yahoo Finance USD/CAD Daily Fundamental Forecast – December 14, 2017
The USDCAD pair fell back towards its range over the last 24 hours after threatening to stage a breakout over the last couple of days. The dollar was hit badly across the board on account of the dovish Fed and this led to the drop in the USDCAD prices towards the 1.28 region. As of this writing, the pair continues clearly within the range and it looks as though a breakout may not be coming anytime soon.
USDCAD in Tight Range
The focus was clearly on the dollar yesterday on account of the CPI data and also the Fed announcement and statement. The CPI data came in as per expectations and though this did not have too much of an impact on the dollar, the underlying weakness in the dollar was beginning to show slowly. This became greater after the Fed statement. The Fed announced the hike of rates and this was widely anticipated by the market and hence was fully priced in.
But the Fed was dovish in its statement though as it increased its growth forecast. The inflation forecast was not improved and this was construed as dovish by the markets for the future rate hikes from the Fed. This led to a dollar sell off which led the pair lower and it was back into range. The pair has been struggling to stage a breakout over the last few weeks and so far it has not been able to do so and been caught in a tight 200 pip range.
Looking ahead to the rest of the day, we have the retail sales data from the US but we do not have any major economic news from Canada. We will have to see whether the retail sales data would be able to bring in any kind of breakout in the pair and if it doesnt, then we have to make ourselves ready for another 2 weeks of consolidation and ranging in the pair.
This article was originally posted on FX Empire
