ForexEzy
No Result
View All Result
  • Home
  • Getting Started with Forex
  • Forex Education
    • Forex Basics
    • Forex Trading Strategies
    • Money Management
    • Risk Management
    • Technical Analysis
    • Fundamental Analysis
    • Trading Psychology
    • Social Trading
    • Automated Trading
  • Forex Tools
    • Forex Robots
    • Forex Indicators
    • Forex Signals
  • Top Forex Brokers
  • Top Forex Robots
  • Commentary
  • Blog
  • Home
  • Getting Started with Forex
  • Forex Education
    • Forex Basics
    • Forex Trading Strategies
    • Money Management
    • Risk Management
    • Technical Analysis
    • Fundamental Analysis
    • Trading Psychology
    • Social Trading
    • Automated Trading
  • Forex Tools
    • Forex Robots
    • Forex Indicators
    • Forex Signals
  • Top Forex Brokers
  • Top Forex Robots
  • Commentary
  • Blog
No Result
View All Result
ForexEzy
No Result
View All Result
Home Forex Market Commentary

USD/CAD: Currency Boost from Employment and Trade Deal

by Tim Baudin
January 27, 2021
in Forex Market Commentary
0
USD/CAD: Currency Boost from Employment and Trade Deal
0
SHARES
11
VIEWS
Share on FacebookShare on Twitter
  • The Bank of Canada has maintained a constant policy rate at 0.25% into 2021.
  • Home sales are expected to increase in the US in 2021 due to Biden’s stimulus package.
  • The revamped USMCA trade deal is expected to favor the US in terms of employment and export.

The Canadian dollar has strengthened by 12.25% against the US dollar since March 19, 2020. Pre-pandemic gains of the US dollar reached a high of 1.4512. Factors attributed to this improvement include a high employment rate, job creation, and the USMCA trade deal. There has also been an increase in housing demand as the work-from-home strategy has turned homes into offices among Americans and Canadians.  The Bank of Canada into 2021 remained unchanged at 0.25% and the bank rate at 0.5%. Despite the second Covid-19 wave, the bank is hopeful that the economy will grow by 4% in 2021.

Mortgage rates into 2020 were reduced to 1% by the Canadian banks making it easy to secure homes. There was also limited supply that made the sale of dwellings (nationwide) spike by 7.2% in December 2020 (MoM). Additionally, the 10-year government bond shot by 0.84% (3 basis points). The BoC’s promise to keep low borrowing costs until 2023 can only hold if inflation stays at the current lows.

inflation rate

The Bank of Canada will not raise interest rates until inflation attains the 2% threshold. The quality is expected to remain at 0.62% in 2021, with fears of additional lockdowns due to the second Covid-19 wave. However, the rate of inflation may reach the intended threshold before the end of 2021. A consideration of the real estate boom shows that Canadian homes’ benchmark prices went up 1.5% into 2021, 13.1% year on year (YoY). The average prices of homes were C$607,280, up from C$531,000.  

price in Canadian dollars

In the US, the average prices of homes have increased by 15.72%, from $334,400 (Q4 2013) to $387,000 (Q3 2020).

average sales prices of houses

Factors driving the US housing boom include high demand and low-interest rates. However, the stimulus effect may increase mortgage rates as inflation is expected to rise in America in 2021. We feel that houses will be more affordable in Canada than in the US. In December 2020, the number of building permits in Canada surged by 12.9% from a forecast of 3.0%. 

The US maintained its unemployment rate at 6.7% into 2021

The US maintained its unemployment rate at 6.7% into 2021, while Canada increased by 0.1% (8.5%-8.6% MoM). While part-time employment reduced by 99,000 in December 2020, the Canadian economy added 36,500 in full-time jobs (MoM). An improvement in the employment trend may also increase the rate of inflation overall.

US-Canada-Mexico (USMCA) trade deal  

USD/CAD chart

The USD/CAD trading pair shot 8.26% from December 2019 to March 2020 in favor of the US dollar. This increase occurred when the US ratified the trade deal with Canada and Mexico in December 2019 to revamp the North American Free Trade Agreement (NAFTA). This deal was seen as one-sided as it took away employment opportunities from the US to Mexico. The latter’s low wage requirements mean that companies found it easy to relocate away from America, especially with tariffs.

The improved trade deal added $1.2 trillion in annual trade across the three countries. This agreement supported a total of 12 million jobs. The USMCA deal would also keep a third of American agricultural export. The trade agreement came into force in July 2020, and we expect to see how it will reinforce job-creation and merchandise trade between the two countries. These factors support a buy position in favor of the US dollar. 

ShareTweet
Previous Post

FXZipper Review

Next Post

Sweet Profit Robot Review

Related Posts

USD/CNY: China Expected to Increase Retail Sales to Support the Yuan

USD/CNY: China Expected to Increase Retail Sales to Support the Yuan

by Tim Baudin
February 11, 2021
0

China has been the greatest beneficiary of the US-China trade war.Reduced consumption in China will lower economic output into 2021.A...

EUR/USD: Why the US Dollar Is Gaining Strength Against the Euro

EUR/USD: Why the US Dollar Is Gaining Strength Against the Euro

by Adam Stanley
February 8, 2021
0

Germany’s manufacturing index fell by 10% in 2020 as compared to 2019. New order levels are yet to return in...

EUR/TRY: Turkish Lira Poised to Strengthen with Soaring Exports

EUR/TRY: Turkish Lira Poised to Strengthen with Soaring Exports

by Richard Brase
February 8, 2021
0

The Turkish lira has gained more than 12% from December 2020 to February 2021.Export sales in Turkey rose by 2.5%...

USD/BRL: Brazil’s Low Rates and Positive Economic Pressure in 2021

USD/BRL: Brazil’s Low Rates and Positive Economic Pressure in 2021

by Tim Baudin
February 5, 2021
0

Brazil is expected to emerge from the high volatility witnessed in 2020.The push by the mining company Vale towards green...

EUR/JPY: Euro Expected to Ride on Positive CPI Data

EUR/JPY: Euro Expected to Ride on Positive CPI Data

by Adam Stanley
February 5, 2021
0

The EUR/JPY trading pair is expected to hit a new resistance above 130 due to robust European economic data.Japan’s reintroduction...

Load More

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Best Forex EA

  • ROFX 9/10
  • Forex Fury 8/10
  • FXgoodway 7.5/10
  • Z Trader FX EA 7/10
  • Forex Incontrol Reborn 6.5/10

Popular News

  • The Best RSI and CCI Combination Trading Strategy for Optimum Returns

    The Best RSI and CCI Combination Trading Strategy for Optimum Returns

    2 shares
    Share 2 Tweet 0
  • Rofx Review – High Profitability and Stable Performance Analysis

    29 shares
    Share 29 Tweet 0
  • The Best Forex Scalping Strategy – Using 3 Popular Technical Indicators

    0 shares
    Share 0 Tweet 0
  • The Best MT4 Indicators & Expert Advisors For Forex Trading

    2 shares
    Share 2 Tweet 0
  • How to check if the indicator is repainting?

    2 shares
    Share 2 Tweet 0

Trading

Footer

We are dedicated to demystify the world of forex trading for you – no matter what level you are on.

Categories
  • Automated Trading
  • Day Trading
  • Forex Basics
  • Forex Brokers
  • Forex Education
  • Forex Forecasts
  • Forex Indicators
  • Forex Market Commentary
  • Forex Robots
  • Forex Signals
  • Forex Tools
  • Forex Trading Strategies
  • Fundamental Analysis
  • Money Management
  • News
  • Risk Management
  • Social Trading
  • Technical Analysis
  • Top World Traders
  • Trading Psychology
  • Uncategorized
Tags
arbitrage atr bollinger bands cci chart patterns classics copy trading courses day trading forex brokers forex charts forex ea forex education forex forecasting Forex Indicators forex software reviews grid trading hedging ichimoku macd market cycles news trading oscillators price action trading rsi social trading strategies tips & tricks trading bots trading platforms trend trading Video
  • Terms of Use
  • Privacy Policy
  • Compensation Disclosure
  • Risk Disclosure
  • About Us
  • Contact Us

Copyright © 2020 by ForexEzy.com

No Result
View All Result
  • Home
  • Getting Started with Forex
  • Forex Education
    • Forex Basics
    • Forex Trading Strategies
    • Money Management
    • Risk Management
    • Technical Analysis
    • Fundamental Analysis
    • Trading Psychology
    • Social Trading
    • Automated Trading
  • Forex Tools
    • Forex Robots
    • Forex Indicators
    • Forex Signals
  • Top Forex Brokers
  • Top Forex Robots
  • Commentary
  • Blog

© 2020, Forexezy.