2014 + 2015 Canadian Dollar Forecasts: CAD Exchange Rate vs British Pound, Euro and US Dollar
- Written by: Gary Howes
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The Canadian dollar continues to show resilience against the British pound while seeing relief against a strengthening USD in the closing sessions of the first day of the new month.
However, those hoping for a stronger euro will be pleased to hear what the outlook holds for the pair, read on!
On Wednesday the following Canadian dollar exchange rate levels are noted:
- The pound sterling to Canadian dollar (GBP/CAD) is 0.04 pct lower at 1.8501.
- The euro to Canadian dollar (EUR/CAD) is 0.06 pct higher at 1.4673.
- The US dollar to Canadian dollar (USD/CAD) is 0.09 pct higher at 1.0972.
Please be aware that all mid-market rates are subject to discretionary charges issued by your bank. An independent FX provider can, in many instances, deliver up to 5% more currency owing to their positioning in the markets. Please learn more here.
US to Canadian dollar forecast: Is the USD rally starting to stall?
The greenback has enjoyed a strong rally over the course of July as markets start to buy into the story of a strengthening US economy and Federal Reserve interest rate rises in 2015.
Nevertheless, the near-term picture shows the USD/CAD stalling around the 1.0940 level following on from the release of US Non-Farm Payrolls on Friday that showed the US economy grew less jobs in July than markets were expecting.
Total nonfarm payroll employment increased by 209,000 in July, and the unemployment rate was little changed at 6.2 percent
Despite the setback for the USD, "the broader trends here remains USD-constructive. The Q2 drop in USD based right on long-term trend support in the low 1.06s and the break out from the March/July consolidation phase (big, bull wedge) implies the resumption of the broader bull trend (towards 1.17/1.18 in the next 6-12 months, potentially)," notes Martin Schwerdtfeger, FX Strategist at TD Securities.
TD Securities expect limited near-term losses and continue to target broader gains for USDCAD.
"Weekly bull trend momentum is aligning with the short-term studies—another big bull signal in our opinion," says Schwerdtfeger.
(If you are holding out for better rates, don't delay and ensure your FX provider has the correct buy orders and stop-loss orders in place. Saving money on international payments is highly dependent on strategy and good service, please learn more.)
Pound to Canadian dollar forecast: GBP-CAD lacks direction
The pound had enjoyed a strong rally against the Canadian unit through the latter half 0f 2013, however the new year brought in a strong resistance point which is broadly noted at current levels.
But where will the pair head next?
TD Securities reckons a recent sell-off, "suggests a little more weakness in store for the cross near-term at least.
"Essentially, the GBP has been pivoting around the 40-day MA without any strong sense of direction for month now, so there’s really no real change in the broader situation. Look for support on dips towards the 1.82 area."
Euro to CAD forecast: Time for a euro rally?
Turning to the euro, "EURCAD’s initial test of resistance at 1.4650—neckline trigger of the 1.4450 double bottom—has been stymied but the cross appears reluctant to back off from the mid 1.46 area and short-term charts suggest that there is
good support intraday at least in the low 1.46 area," says Schwerdtfeger.
Furthermore, those hoping for a stronger euro against the CAD will be pleased to here that TD Securiteis, "still rather think near to medium-term risks are shifting towards a rally in EURCAD.
"The bear trend has reached our technical target (we had been looking for a drop to 1.4450 since the May break lower) and selling momentum has clearly waned as the market moved sideways through July. We look for 1.4850 on a sustained move above 1.4650."
