- The Canadian dollar revived brief -term profits on Friday.
- US President Donald Trump announced that his team is finishing all commercial talks with Canada.
- Canadian GDP growth contracted in April, adding further inheritance pressure to Loon’s flows.
Canadian dollar (CAD) on Friday, going back to the combination of weakening Canadian gross domestic product (GDP) (GDP) and fresh commercial voltage with US President Donald Trump. Trump’s team seems to pull up the rates and completely abandons the commercial negotiating table, and Donald Trump announces that they are taking the ball and returning home on social media on Friday afternoon.
Canadian GDP growth contracted in April, knocking Loon’s sentiment a little lower. Between the relief of inflation data and the decrease in the prospects for the growth of the fresh batch of foot reductions from the Bank of Canada (BOC) plants.
Daily Digest Market Movers: Canadian dollar breakdowns among the slowdown, fresh tariff threats from Trump
- The Canadian dollar rejected brief -term profits, falling against the green -mubac and strengthening the USD/CAD pair to 1.3750 on Friday.
- The Canadian GDP contracted by 0.1% in May. The print of growth has no weight independently, but adds slightly more trusting to traders betting on the return of BOC rates.
- US President Donald Trump announced on Friday through social media that he would completely pull the US out of commercial talks with Canada.
- Donald Trump improperly appointed levels of dairy tariffs, which are already covered by his own USMCA trading agreement, which he negotiated during his first term, and stated that in the next seven days he announces more tariffs in Canada.
- President Trump seems to be frustrated that Canada continues to close a predatory tax gap, which allows American technology companies to sell its products on Canadian markets without tax. The fresh fee, which enters into force on cross -border technology services, was many years, but the Trump administration waited for the eleventh hour to pull out all the rates.
The price of the Canadian dollar price
Fresh sanguine rotary in the USD/CAD parish, reinforced with fresh fight with Loon weakness, pushed a pair of Liono-Dolar back into the descending trend line pulled out of many decaded ups published in January. The general shoe of trends is still tilted in favor of the Canadian dollar, because the American dollar will pack under the weight of global sales pressure, but short-term shocks for CAD stability may have led USD/CAD back/CAD back to the high direction and challenge the 200-day interpretation average (EMA) near 1,3950.
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 secure 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 operate 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 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 powerful 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.
