- The USD/CAD falls even more and is approaching 1,4250 in the middle of the strength of the Canadian dollar.
- Investors doubt that the BOC continues to reduce interest rates after the publication of the February Hot IPC report.
- The feeling of risk remains cautious since US President Trump is expected to announce significant tariffs on April 2.
The USD/CAD pair extends its downward movement for the third consecutive day on Wednesday and slides about 1,4250. The Loonie pair weakens while the Canadian dollar (CAD) is negotiated in front of its peers, except the antipodeans.
Canadian dollar today
The lower table shows the change percentage of the Canadian dollar (CAD) compared to the main currencies today. Canadian dollar was the strongest currency against pound sterling.
| USD | EUR | GBP | JPY | CAD | Aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.03% | 0.30% | 0.15% | -0.20% | -0.39% | -0.48% | 0.10% | |
| EUR | 0.03% | 0.33% | 0.15% | -0.17% | -0.35% | -0.45% | 0.12% | |
| GBP | -0.30% | -0.33% | -0.14% | -0.49% | -0.67% | -0.78% | -0.17% | |
| JPY | -0.15% | -0.15% | 0.14% | -0.34% | -0.55% | -0.63% | -0.04% | |
| CAD | 0.20% | 0.17% | 0.49% | 0.34% | -0.16% | -0.28% | 0.32% | |
| Aud | 0.39% | 0.35% | 0.67% | 0.55% | 0.16% | -0.10% | 0.50% | |
| NZD | 0.48% | 0.45% | 0.78% | 0.63% | 0.28% | 0.10% | 0.59% | |
| CHF | -0.10% | -0.12% | 0.17% | 0.04% | -0.32% | -0.50% | -0.59% |
The heat map shows the percentage changes of the main currencies. The base currency is selected from the left column, while the contribution currency is selected in the upper row. For example, if you choose the Canadian dollar of the left column and move along the horizontal line to the US dollar, the percentage change shown in the box will represent the CAD (base)/USD (quotation).
The CAD rises since investors hope that the Bank of Canada (BOC) can adopt a neutral position in monetary policy after having remained significantly DOVISH since June 2024. These expectations have arisen from the report of the consumer price index (CPI) of February, which showed that inflation accelerated at a faster rate than expected.
However, faith in the Loonie is linked to the tariff agenda of the president of the United States (USA), Donald Trump. Trump is prepared to announce a series of tariffs for its commercial partners on April 2.
Meanwhile, the American dollar index (DXY), which follows the value of the dollar against six main currencies, struggles to break above the immediate resistance of 104.50, which is the highest level in almost three weeks. Looking ahead, investors will focus on the data of the US Personal Consumption Expenditure Index (PCE) for February, which will be published on Friday. Inflation data will influence market expectations on the monetary policy perspective of the Federal Reserve (FED).
The USD/CAD is maintained above the exponential mobile (EMA) average of 100 periods, which is around 1,4226, which suggests that the general trend is upward.
The relative force index (RSI) of 14 periods oscillates in the range of 40.00-60.00, indicating a lateral trend.
Looking ahead, an upward movement would arise above the maximum of March 10, 1,4470, which would open the door to the psychological resistance of 1,4500 and the maximum of January 30, 1,4595.
On the contrary, a downward break below the minimum of February 14, 1,4151 by the PAR would expose it to a minimum of December 9, 1,4094, followed by the minimum of December 6, 1,4020.
USD/CAD DAILY GRAPH
Canadian dollar faqs
The key factors that determine the contribution of the Canadian dollar (CAD) are the level of interest rates set by the Bank of Canada (BOC), the price of oil, the main export product of Canada, the health of its economy, inflation and commercial balance, which is the difference between the value of Canadian exports and that of its imports. Other factors are market confidence, that is, if investors bet on riskier assets (Risk-on) or seek safe assets (Risk-Off), being the positive risk-on CAD. As its largest commercial partner, the health of the US economy is also a key factor that influences the Canadian dollar.
The Canada Bank (BOC) exerts a significant influence on the Canadian dollar by setting the level of interest rates that banks can provide with each other. This influences the level of interest rates for everyone. The main objective of the BOC is to maintain inflation between 1% and 3% by adjusting interest rates to the loss. Relatively high interest rates are usually positive for CAD. The Bank of Canada can also use quantitative relaxation and hardening to influence credit conditions, being the first refusal for CAD and the second positive for CAD.
The price of oil is a key factor that influences the value of the Canadian dollar. Oil is the largest export in Canada, so the price of oil tends to have an immediate impact on the value of the CAD. Generally, if the price of oil rises, the CAD also rises, since the aggregate demand of the currency increases. The opposite occurs if the price of oil drops. The highest prices of oil also tend to give rise to a greater probability of a positive commercial balance, which also supports the CAD.
Although traditionally it has always been considered that inflation is a negative factor for a currency, since it reduces the value of money, the opposite has actually happened in modern times, with the relaxation of cross -border capital controls. Higher inflation usually leads to central banks to raise interest rates, which attracts more capital of world investors who are looking for a lucrative place to save their money. This increases the demand for the local currency, which in the case of Canada is the Canadian dollar.
The published macroeconomic data measure the health of the economy and can have an impact on the Canadian dollar. Indicators such as GDP, manufacturing and services PMIs, employment and consumer confidence surveys can influence the CAD direction. A strong economy is good for the Canadian dollar. Not only attracts more foreign investment, but it can encourage the Bank of Canada to raise interest rates, which translates into a stronger currency. However, if the economic data is weak, the CAD is likely to fall.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
