- USD/CAD trades with gentle profits near 1.3685 at the Thursday early Asian session.
- According to minutes, most FED officials expected that rate discounts would be appropriate this year.
- Initial claims on the occasion of unemployment in the USA will be the most critical event on Thursday.
The USD/CAD pair publishes a miniature profit of around 1.3685 during an early Asian session on Thursday, strengthened by a stronger American dollar (USD). Traders will closely monitor negotiations between the United States and their trade partners. Initial claims on the occasion of unemployment in the US are to appear later on Thursday.
US President Donald Trump presented on Wednesday a up-to-date round of letters with a request of tariffs, increasing the concerns about the renovated global trade war. The flood of letters and additional tariff threats were the latest development in a stunning trade program, which caused variability in the markets. This, in turn, weighs more risky assets, such as the Canadian dollar (CAD) and creates a wind for a couple.
The protocols from the meeting from June 17-18 published on Wednesday indicated that decision -makers largely maintained the waiting position for future rate movements. The meeting ended in the fact that members of the Federal Open Market Committee (FOMC) voted unanimously to leave a key loan rate unchanged in the range from 4.25%-4.50%, where this was the case since December 2024. Most participants in July recorded a certain reduction in the Fed fund rate this year, according to the relevant one, according to the relevant meeting.
Meanwhile, the recovery of oil prices may in the near future form the basis of Loon associated with the goods. It is worth noting that Canada is the largest oil exporter for the USA, and higher oil prices usually have a positive effect on the value of CAD.
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 exploit 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 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.
