- The Canadian dollar has found higher grounds against the besieged greenback.
- A key rate of the key Fed is looming in the middle of the week and could lead to new volatility.
- The joint press conference of Canadian PM Carney with US President Trump has revealed large gaps in commercial expectations and the lack of American clarity.
The Canadian dollar (CAD) increased against the US dollar (USD), sending the Huard in recent summits against the greenback and pushing the CAD on more than a third of the USD on Tuesday. The feeling of the market found little support after a joint press conference between Canadian Prime Minister Mark Carney and a President of the United States (United States), Donald Trump, who has experienced extreme difficulties in providing a coherent political orientation.
Despite an approximate program by President Trump at a key key press conference, the upcoming price call from the Federal Reserve on Wednesday is the key event of the week, investors are waiting for signs of a pivot to a reduction in the rate of Fed decision -makers. Canadian economic data has also started to soften while an imminent economic recession faces increasingly drop-down rising risks in the face of a convoluted trade in the United States.
Daily Digest Market Movers: Canadian Dollar grabs an offer on the low greenery of the wide market
- The Tuesday Canadian dollar gain pushed the USD / CAD in new stockings of several months below 1,3800.
- The figures for the purchase managers purchase managers' purchase managers (PMI) adjusted in season (PMI) showed another sharp decline in the expectations of commercial conditions, falling below 48.0 against the expected 51.2.
- The Fed should largely keep interest rates pending on Wednesday, but investors will have traveled the declarations of the Fed officials, and the president of the Fed, Jeromy Powell, specifically, for any sign of a possible pivot to cuts for future rate.
- The joint press conference of Carney-Trump took place as well as the expected markets.
- According to Prime Minister Carney, the USMCA trade agreement currently adapted is a good “starting point”, but some things about the agreement will have to change. According to President Trump, the USMCA does not need to be renegotiated, but can be renegotiated, but it is preferable for everyone, but not yet enough to protect American commercial interests, all at the same time.
Canadian dollar price forecasts
While the Browe-Market Greenback Seloff continues to cring, the Canadian dollar continues to find higher ground against the USD. The USD / CAD went to a new seven -month hollow on Tuesday, tapping 1,3750 for the first time since October of last year.
The momentum remains largely absent from the USD / CAO graphic, and geopolitical changes will be the main engine of waiting for prices. The pair still falls into the southern side of the 200-day exponential mobile average (EMA) just above 1.4000, and despite a global configuration of slow graphic, the biased bias is still tilt in favor of the Huard for the moment.
Daily graphic USD / CAD
Canadian dollar FAQ
The key factors at the origin of the Canadian dollar (CAD) are the level of interest rate set by the Bank of Canada (BOC), the price of oil, the largest export in Canada, the health of its economy, inflation and trade balance, which is the difference between the value of exports of Canada compared to its imports. Other factors include the feeling of the market – that investors have more risky assets (risk) or are looking for safety havens (risk) – with the risk for the positive CAD. As the most important trading partner, the health of the American economy is also a key factor influencing the Canadian dollar.
The Bank of Canada (BOC) has a significant influence on the Canadian dollar by fixing the level of interest rate that banks can lend each other. This influences the level of interest rate for everyone. The main objective of the BOC is to maintain inflation to 1 to 3% by adjusting increased or declining interest rates. Relatively higher interest rates tend to be positive for CAD. The Bank of Canada can also use a quantitative softening and tightening to influence credit conditions, with the old cad-negative and the last positive frame.
The price of oil is a key factor with an impact on the value of the Canadian dollar. Oil is the largest export in Canada, so the price of oil tends to have an immediate impact on CAD value. Generally, if the price of oil increases, the CAD also increases, because the overall demand for money increases. The reverse is the case if the price of oil decreases. The higher oil prices also tend to lead to a greater probability of a positive trade balance, which also supports CAD.
Although inflation has always been considered a negative factor for a currency because it reduces the value of money, the reverse was in fact the case in modern times with the relaxation of cross -border capital controls. A higher inflation tends to lead central banks to set up interest rates that attract more capital entries from global investors looking for a lucrative place to keep their money. This increases demand for local currency, which in the case of Canada is the Canadian dollar.
Macroeconomic data versions assess the health of the economy and may have an impact on the Canadian dollar. Indicators such as GDP, Manufacturing and PMIS services, employment and surveys on consumer feelings can all influence CAD management. A strong saving is good for the Canadian dollar. Not only does it attract more foreign investment, but it can encourage the Bank of Canada to install interest rates, which leads to a stronger currency. If the economic data is low, however, CAD is likely to decrease.
