- The USD / CAD moved to nearly 1,3,7660 while the US dollar bounces on signs of progress in the US trade agreement.
- The EU has asked its national companies to provide details on investment plans in the United States.
- Investors await Canadian GDP data in the first quarter Friday before the BOC monetary policy announced next week.
The USD / CAD pair is accompanied by almost 1,3760 during European negotiation hours on Tuesday. The Pair of Loonie increases as the US dollar (USD) is gaining ground due to the summary of trade tensions between the European Union (EU) and the United States (United States).
The US dollar index (DXY), which assesses the value of the greenback against six main currencies, jumps to almost 99.35 compared to the lowest monthly of 98.70 displayed on Monday.
During European negotiation hours, a Reuters report showed that EU officials had asked Bloc companies to share the details indicating their investment plans in the United States. This indicates that the continent makes efforts to accelerate progress towards the conclusion of a trade agreement with the United States.
On Monday, trade tensions between the EU and the United States also decreased and the expectations that the two economies reached a potential bilateral agreement increased after the European Commissioner on Maros Sefcovic Commerce to X in which it declared that the European Commission remains “fully engaged in constructive efforts at a rate of EU-US”. “We continue to stay in constant contact,” he added.
Although the Canadian dollar (CAD) is underperforming the US dollar, it is negotiated against other major peers during European negotiation hours on Tuesday.
Canadian dollar price today
The table below shows the percentage of variation in the Canadian dollar (CAD) compared to the main currencies listed today. The Canadian dollar was the strongest against the Japanese yen.
| USD | Eur | GBP | Jpy | Goujat | Aud | Nzd | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.37% | 0.21% | 0.89% | 0.18% | 0.65% | 0.85% | 0.75% | |
| Eur | -0.37% | -0.18% | 0.49% | -0.19% | 0.21% | 0.38% | 0.36% | |
| GBP | -0.21% | 0.18% | 0.70% | -0.01% | 0.37% | 0.56% | 0.49% | |
| Jpy | -0.89% | -0.49% | -0.70% | -0.68% | -0.24% | -0.11% | -0.14% | |
| Goujat | -0.18% | 0.19% | 0.01% | 0.68% | 0.45% | 0.59% | 0.51% | |
| Aud | -0.65% | -0.21% | -0.37% | 0.24% | -0.45% | 0.09% | 0.03% | |
| Nzd | -0.85% | -0.38% | -0.56% | 0.11% | -0.59% | -0.09% | -0.10% | |
| CHF | -0.75% | -0.36% | -0.49% | 0.14% | -0.51% | -0.03% | 0.10% |
The thermal map shows the percentage of variations in the main currencies against each other. The basic currency is chosen in the left column, while the quotes motto is chosen in the upper row. For example, if you choose the Canadian dollar in the left column and you move along the horizontal line to the US dollar, the percentage of variation displayed in the box will represent CAD (base) / USD (quote).
This week, the major trigger of the Loonie will be the first quarter and data from the Gross Domestic Product (GDP) of March, which will be published on Friday. The Canadian economy should have increased at a moderate rate of 1.6% on an annualized basis, compared to 2.6% previously reported. Next week, investors will pay special attention to the Banque de Canada's interest rate decision (ECB).
US dollar FAQ
The US dollar (USD) is the official currency of the United States of America and the “de facto” currency of a large number of other countries where it is in circulation alongside local tickets. It is the most negotiated currency in the world, representing more than 88% of all global turnover, an average of 6.6 billions of dollars of transactions per day, according to data from 2022. After the Second World War, the USD took over from the British book as a global reserve currency. For most of its history, the US dollar was supported by gold, until the Bretton Woods agreement in 1971 when the Order stallion left.
The single most important factor on the value of the US dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to reach price stability (controlling inflation) and promoting full employment. Its main tool to achieve these two objectives is to adjust interest rates. When prices are increasing too quickly and inflation is greater than the 2% target of the Fed, the Fed will increase rates, which helps the USD value. When inflation falls below 2% or the unemployment rate is too high, the Fed can reduce interest rates, which weighs on the greenback.
In extreme situations, the federal reserve can also print more dollars and promulgate a quantitative relaxation (QE). QE is the process by which the Fed considerably increases the credit flow in a blocked financial system. This is a non -standard political measure used when credit has dried up because the banks will not lend themselves (by default of the fear of the counterpart). This is a last appeal when the simple drop in interest rates is unlikely to achieve the necessary result. It was Fed's weapon of choice to combat the credit crisis that occurred during the great financial crisis in 2008. It implies the Fed Print more dollars and use them to buy US state bonds mainly from financial institutions. QE usually leads to a lower US dollar.
The quantitative tightening (QT) is the opposite process by which the federal reserve ceases to buy obligations from financial institutions and does not reinvest the principal of the obligations it holds in new purchases. It is generally positive for the US dollar.
