It is not surprising for many people and businesses to look forward to daily CAD Forecast; after all, the Canadian dollar is the 5th most widely held foreign currency besides the US dollar, yen, euro and the British sterling. The Canadian dollar accounts for about 2% of the global foreign exchange reserves particularly since the country is relatively safe with a stable legal and political system.
The Canadian dollar or also known as the loonie is a part of the commodity currencies together with the Australian dollar, Norwegian krone and to a lesser extent the Chilean peso. The reason behind this is the bulk of the Canadian economy is linked to the production of commodities that include oil and gas, metal mining and agriculture.
As a consequence of being part of the commodity currencies, the Canadian dollar rises when the commodity market is strong and declines when the commodity market weakens. Testament to that is the commodities super-cycle that started during the turn of the millennium. An example is when the oil prices went to low double digits ($10 to $12 per barrel) with gold below $300 per troy ounce and grains becoming cheaper, the Canadian dollar moved below $0.65.
On the other hand, when crude oil prices reached a record high of $147 per barrel in 2007, the Canadian dollar went briefly under parity to the US dollar to a high $1.10. No later than 2010, the loonie is still valued at $1.05. However, the trend has steadily gone downwards and now the loonie is only worth about $0.75.
Since most central banks are on track for further monetary easing, it is expected that the Bank of Canada will also follow the US Federal Reserve cuts. Meanwhile the worsening US-China trade war can weigh heavily on the global economic outlook and may affect the commodity currencies on short term.
It is very important to be aware of the daily CAD Forecast if you involved in the commodity market so that you make informed decisions. However, it is also important to ensure that the CAD forecasts are accurate and based on several factors that affect currencies.