The Canadian Dollar (CAD) saw a modest rise of 0.4% against the US Dollar (USD) on Monday, as global markets prepare to wrap up a quiet 2024 trading season. With many investors sidelined due to the holiday season and midweek market closures for New Year’s Day, the Loonie’s recent movement reflects a lack of strong momentum in the market.
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Limited Economic Data to Kick Off 2025
Canadian economic updates are sparse this week, with the focus on Thursday’s Canadian Manufacturing Purchasing Managers Index (PMI) release. The US will follow suit with ISM Manufacturing PMI figures on Friday. Both data points are expected to show a slight dip, reflecting cooling business expectations as markets transition out of the holiday period.
Market Snapshot: CAD vs. USD
- CAD Performance: The Loonie rebounded 0.4% against the Greenback to start the week but remains near multi-year lows.
- Trading Volume: Holiday-related closures are keeping market activity subdued, with Canadian and US markets shuttered on New Year’s Day.
- Economic Outlook: PMI survey results from Canada and the US later this week are anticipated to trend downward, pointing to slower economic activity as 2025 begins.
Canadian Dollar Price Forecast
The Canadian Dollar remains under pressure, trading near multi-year lows against the US Dollar. The USD/CAD pair is hovering around the 1.4400 level, a critical chart region for traders. Despite the lack of bullish momentum for the Loonie, this technical level has shown resilience.
Over the past three months, the USD has maintained a dominant position, closing higher against the CAD in 10 out of the last 12 trading weeks. This medium-term bull run saw the Greenback gain 7.8% against the Loonie.
What’s Next for the USD/CAD Pair?
For CAD bulls, the immediate challenge lies in pushing the USD/CAD pair back below the 1.4300 handle. However, with limited economic data to spark movement and market sentiment weighed down by a post-holiday slowdown, significant shifts are unlikely in the near term.
Investors will be watching PMI data closely this week, as it could provide some directional cues for the CAD in the early days of 2025. For now, the Canadian Dollar remains in a precarious position, reflecting broader economic uncertainties.
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The Canadian Dollar’s modest gains at the end of 2024 highlight the subdued nature of holiday trading. With markets largely on pause and limited economic indicators on the calendar, the Loonie’s near-term performance will hinge on Thursday’s PMI results and subsequent US data. As the global market gears up for a new year, CAD traders are eyeing technical levels and broader economic trends for signs of a potential rebound.
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