Canadian Dollar Slumps Back Into Multi-Year Lows -

Canadian Dollar Slumps Back Into Multi-Year Lows

Jan 17, 2025Jeremy ParkinsonFinance0

The Canadian Dollar shed another third of a percent against the Greenback.

A lack of meaningful data from Canada is doing little to bolster the battered Loonie.

Canadian CPI inflation due next week unlikely to spark much confidence.

The Canadian Dollar (CAD) slumped back into familiar multi-year lows on Friday, sending USD/CAD back above the 1.4400 handle and keeping the Loonie at its lowest bids since the pandemic era. The trading week is wrapping up with a thin data calendar, but hopes for future Federal Reserve (Fed) rate cuts are highlighting just how much the USD/CAD interest rate differential is set to widen.Canada is slated to release its latest Consumer Price Index (CPI) index figures next Tuesday, and Canadian headline inflation figures are expected to slip further below the Bank of Canada’s (BoC) target. Which will only prompt further expectations of BoC rate cuts.

Daily digest market movers: CAD loses ground, tests long-term lows

The Canadian Dollar fell nearly four-tenths of a percent against the Greenback on Friday.

Excluding the pandemic, these are the CAD’s lowest bids against the USD since early 2016.

No meaningful data on the economic calendar for Friday means the Loonie had to face broader market flows standing alone.

Markets will open with choppy flows next week, with US markets dark for a holiday and incoming US President Donald Trump slated to be inaugurated, both on Monday.

Canada’s headline CPI inflation measure for the year ended December is expected to decelerate further next Tuesday, forecast to decline to 1.7% from 1.9%.

Canadian Dollar price forecast
With the Loonie testing back into multi-year lows ahead of key inflation data that will surely confirm a widening interest rate differential, USD/CAD traders should be bracing for a fresh push into new highs on the chart as the Canadian Dollar falls further next week.USD/CAD has been cycling in a near-term consolidation phase, but that sideways grind may be coming to an end next week, in either direction.

USD/CAD daily chart
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