- The Canadian dollar gained another 0.66%on Friday.
- Market flows turn away from Greenback, pushing Loon auction above.
- Combining the BOC rate next week. Markets are waiting to see if the BOC will continue to provide a reduced rate at the last minute.
The Canadian dollar (CAD) increased on Friday, jumping by two -thirds of percentage compared to the American dollar, because the global market flows still turn away from sheltered greenback. Trade war pressure was slightly released after the Trump administration pulled itself away from its own skewed “mutual” tariffs after a 90-day delay, choosing a 10% replacement tariff. Combined with 145% import fees of all goods from China, the trade war will keep investors with one eye on geopolitical headers for the near future.
Bank of Canada (BOC) is to provide the latest joint connection next week, and the key inflationary data of the Canadian consumer price indicator (CPI) are also planned next Tuesday. Pressure on BOC, because the markets expect to check if they will stop the rate changes after a long -term series of rates, or the BOC Tiff Mackl governor will try to push one more by cutting the rate before the economic effects of American tariffs will start to take part in the Canadian economy.
Daily Digest Market Movers: Dollar Canadian Clust for a weakness for green
- The Canadian dollar increased to a 22-week level compared to the American dollar on Friday.
- The war tensions of tariffs and commercial remain elevated, but regardless of this markets back to appetite.
- The US key data has shown a further decrease in inflation of the US manufacturer’s price index (PPI) in March, but the tariffs may shorten this progress.
- Consumer moods in the US also have also collapsed, and American consumers also expect that both short- and long-term inflation increases, also thanks to tariffs.
- The Canadian CPI inflation is to take place next Tuesday, which may inform about the next connection of BOC, which is to be on the next Wednesday.
The price of the Canadian dollar price
On Friday, the Canadian dollar profit on Friday led USD/CAD to a weekly loss of 2.3% and accelerated the steam to its fifth loss in a week on week, when Loon is strengthened by the overall weakness of demand on the green market. USD/CAD broke the 200-day interpretation average (EMA) at 1.4072, setting a pair at a pace for longer drops.
On the stubborn side, technical oscillators flash warning signs about recreation on USD/CAD, when the pair examines many months below the handle 1,3900. The customer price is threatened at an agility on senior points technical swings at a price from 1.3800 to 1.3900 to two middle quarters of 2024.
Daily USD/CAD chart
Canadian Dollar Faq
The key factors that drive the Canadian dollar (CAD) are the level of interest rates set by Bank of Canada (BOC), oil price, the largest Canada export, economy health, inflation and commercial balance, which is the difference between the value of Canada exports compared to its import. Other factors include market moods-notterlessly from whether investors take more risky assets (risk), or are looking for sheltered havens (risk)-risk that is positive. As the largest commercial partner, the health of the American economy is also a key factor affecting the Canadian dollar.
Bank of Canada (BOC) has a significant impact on the Canadian dollar, determining the level of interest rates that banks can borrow. This affects the level of interest rates for everyone. The main goal of BOC is to maintain inflation of 1-3% by adjusting interest rates up or down. Relatively higher interest rates are usually positive for CAD. Bank of Canada can also utilize quantitative alleviation and tightening to affect credit conditions, with former negative CAD and the second positive.
The price of oil is a key factor affecting the value of the Canadian dollar. Petroleum is the largest Canada export, so the price of oil tends to immediately affect the value of CAD. Basically, if the oil price also increases CAD, as the number of demand for currency increases. Otherwise, the price of oil will drop. Higher oil prices usually cause a greater probability of a positive trade balance, which also supports CAD.
While inflation has always been traditionally considered a negative factor of currency, because it reduces the value of money, on the contrary it was in current times with relaxation of cross -border capital control. Higher inflation tends to run central banks to determine interest rates, which attracts greater capital revenues of global investors looking for a lucrative place to maintain money. This increases the demand for the local currency, which in the Canadian case is the Canadian dollar.
Macroeconomic data release the health of the economy and may affect the Canadian dollar. Indicators such as GDP, PMI production and services, surveys on employment and consumer moods can affect the direction of CAD. A mighty economy is good for the Canadian dollar. It not only attracts more foreign investment, but can encourage Bank Canada to set interest rates, which leads to a stronger currency. However, if economic data is tender, the CAD will probably fall.
