The US dollar has fallen against the Canadian dollar on Friday, as traders pay attention to the oil markets heading into the weekend.
USD/CAD
The US dollar has found quite a bit of selling pressure against the Canadian dollar but at this point in time I would probably be remiss if I did not suggest the fact that this is probably more oil related than anything else. I don't necessarily think it has anything to do with the US dollar although this pair isn't necessarily sensitive to oil typically.
The reality is that oil has spiked so much that people are buying Canadian dollars and converting them doing transactions internationally which means they have to go through the route of US dollars sometimes depending on the pair and therefore we do have a little bit of residual knock-on effect here. If oil really starts to spike it is possible that we could drop significantly from here but I look for the 1.35 level to hold as support. If it doesn't then fine whatever we reset near the 1.33 level.
Oil Influence and Economic Uncertainty
This is a market that has been consolidating for a while, this is just the latest reason for more consolidation. We could not break above the crucial 1.3750 level and as a result I think that just tells you we are not ready to rally. I do think there are a lot of reasons to be concerned out there with geopolitics and economic situations around the world but with the jobs number coming in weaker than anticipated in the United States although some of that is going to be skewed because of government shutdowns or partial shutdowns in the recent past.
But at the same time retail sales are higher, the unemployment rate is pretty much where they anticipated it is just a mess at this moment to try to get a clear picture of the US economy. So, with all of that being said I think you will default to a range that makes quite a bit of sense against the Canadian dollar specifically as most of Canada's economy is highly dependent on the US.
If the US starts to fall apart most of the time that works against the Loonie. This is probably just an amalgamation of everything that is going on but by the time it is all said and done I don't think much has changed.