USD/CAD Forecast Poll

The FXStreet Forecast Poll about USD/CAD (US Dollar vs Canadian Dollar) is a sentiment tool that highlights our selected experts' near and medium term mood and calculates trends according to Friday's 15:00 GMT price.

How to Read the Forecast Poll charts

OVERVIEW

This chart informs about the average forecast prices, and also how close (or far apart) sit the numbers from all participants surveyed that week. The bigger a bubble on the chart means more participants targeting a certain price level in that particular time horizon. This distribution also tells if there is unanimity (or disparity) among participants.

Bias

Each participant's bias is calculated automatically based on the week's close price and recent volatility. Drawing from those results, this chart calculates the distribution of bullish, bearish, and sideways forecast prices from all participants, informing about sentiment extremes, as well levels of indecision reflected in the number of “sideways”.

Averages

By displaying three central tendency measures (mean, median, and mode), you can know if the average forecast is being skewed by any outlier among the poll participants.

shifted price

In this chart, the close price is shifted behind so it corresponds to the date when the price for that week was forecasted. This enables the comparison between the average forecast price and the effective close price.

price change

This chart tracks the percentage change between the close prices. Bouts of volatility (or extreme flat volatility) can be then compared to the typical outcome expressed through the averages.

smooth average

This measure is basically an arithmetical average of the three central tendency measures (mean, median, and mode). It smooths the typical outcome eliminating any possible noise caused by outliers.

min/max

Together with the close price, this chart displays the minimum and maximum forecast prices collected among individual participants. The result is a price corridor, usually enveloping the weekly close price from above and below, and serves as a measure of volatility.

USD/CAD, THE “LOONIE”

The USD/CAD pair tells the trader how many Canadian dollars (the quote currency) are needed to purchase one U.S. dollar (the base currency). This currency pair is also known as the "Loonie", a nickname derived from the picture of a loon, a distinctive bird which appears on one side of the Canada's gold-colored, one Dollar coin.

ORGANIZATIONS, PEOPLE AND ECONOMIC DATA THAT INFLUENCE USD/CAD

In Canada, the organizations and people that affect the most the moves of the USD/CAD pair are:

  • The Bank of Canada that issues statements and decides on the interest rates of the country.
  • Canadian Government and its Department of Finance that implement policies that affect the economy of the country.

In the USA, we have:

  • The US Government: events as administration statements, new laws and regulations or fiscal policy can increase or decrease the value of the US Dollar.
  • Fed, the Federal Reserve of the United States. The Fed controls the monetary policy, through active duties such as managing interest rates.
  • Currencies: This group also includes the following currency pairs: EUR/USD, GBP/USD, USD/JPY, AUD/USD, NZD/USD, EUR/GBP and USD/CHF

USD/CAD FORECAST FOR 2023

The policy divergence between the Bank of Canada and the US Federal Reserve could continue to drive USD/CAD’s action in 2023.

After raising its policy rate by 25 basis points to 4.5% following the January policy meeting, the BoC announced that it is likely to hold the rate at this level while assessing the impact of cumulative rate hikes.

On the other hand, the Fed left the door open for multiple rate hikes in 2023 as it remains concerned about wage inflation causing price pressures to remain uncomfortably high throughout the year.

Both central banks reiterated that they will be prepared to adjust the policy depending on the developments surrounding inflation and labor market conditions.

As things currently stand in early 2023, the respective policy outlooks of the Bank of Canada and the Federal Reserve favor USD/CAD bulls. It’s worth noting, however, that the commodity-sensitive Canadian Dollar could stay resilient against its American counterpart in case oil prices continue to rise. The west’s sanctions against Russia and the Organization of the Petroleum Exporting Countries’ (OPEC) willingness to use the output strategy to limit oil’s downside could support energy prices in 2023.