- The Canadian dollar has gained a full percentage compared to the American dollar.
- Loon climbed seven -month -old peaks against USD as commercial threats resumed.
- Canadian economic data was slim this week, leaving CAD following the wide market flow.
The Canadian dollar (CAD) caught a huge augment in weakness on the market on Friday. Liono climbed a full percentage of USA Waffling of the US dollar (USD) after a modern party incredibly looking tariff threats on the part of the President of the United States (USA) Donald Trump.
Canadian economic data was strictly average for most of this commercial week, leaving Loon at the grace of wider investment moods. Next week, a clearly slim note will also start: American markets will be closed for a longer weekend, and on both sides there is little attention next week to the Friday printout of the personal price indicator inflation in the USA (PCE).
Daily Digest Market Movers: Canadian dollar traders fully employ weakness for green
- The Canadian dollar tested the highest offers on Friday in relation to the American dollar, moving a pair of USD/CAD to 1.3720.
- US President Donald Trump wants to value individual technology companies which do not turn the whole business model to the production of their goods in the US, despite the fact that their entire production cycle was built around the margins of profits from importing goods from countries with lower earnings.
- President Trump also returned to “recommending” the entire 50% tariff for goods imported from the European Union (EU) in repeating identical tariff threats, from which Trump has already withdrew in the first quarter.
- American markets will be closed on Monday for a long weekend Memorial, tightening on the market at the beginning of next week.
- PCE inflation in the USA will be a key print next week, but the main inflation indicators are still lacking possible rainfall from tariffs.
The price of the Canadian dollar price
The Canadian dollar is now testing seven months compared to the American dollar, pushing the best offers against Greenback since October last year. Loon is rushing to fill the void left by the weakening of the American dollar pressure by sending USD/CAD towards the handle 1,3700.
USD/CAD fell on five consecutive trade sessions because the sales of Greenback accelerates the pace. The couple stare at the technical rejection of the 200-day interpretation average (EMA) near 1.4020, but too steep in relation to the drops attracted technical oscillators too quickly on the sale territory, which suggests reflection on the cards.
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 unthreatening 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 employ quantitative alleviation and tightening to affect credit conditions, with former negative CAD and the second positive CAD.
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 newfangled 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 robust 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 frail, the CAD will probably fall.
