- The Canadian dollar shook on Monday, falling briefly before rising to new family technical levels.
- The Perspective Survey of the Bill provides for more tariff tensions on the horizon while companies prepare for the fall of sales and price peaks.
- The key inflation data of the US marks the economic calendar this week.
The Canadian dollar (CAD) shook to start the new week of operations, rising briefly after the US dollar (USD) suffered a new blow for rumors of a possible extension of tariffs by the Trump administration. The president of the USA, Donald Trump, was quick to deny rumors, stating that not only is he not considering any tariff exemption, but would seek additional tariffs about China after Chinese officials responded to the new US tariffs with contraceles.
The latest business perspective survey of the Bank of Canada (BOC) found that many Canadian companies are preparing for prolonged repercussions of “reciprocal” and US general tariffs.
Daily summary of market movements: headlines on tariffs dominate market flows
- The Canadian dollar is still trapped near the 1,4200 area against the US dollar.
- The Loonie fell 0.6% against the US dollar early on Monday, before reversing the course and returning to the opening offers of the day.
- The US president, Donald Trump, has issued a threat of imposing an additional 50% tariff About China as the Trump administration intensifies its reprisal position against countries that respond to US tariffs.
- According to the Boc perspective surveya growing number of Canadian companies hopes to have to increase prices thanks to US tariffs.
- Canadian consumers also expect an increase in the chances of a recession in the coming months.
- The inflation figures of the US Consumer Price Index (CPI) will be published later this week on Thursday.
- The US production price index (PPI) index on Friday and the consumer’s feeling index of the University of Michigan (UOM) will attract a lot of attention from investors as the markets are directed towards an environment after tariffs.
Prognosis of the price of the Canadian dollar
Despite the short -term changes in intradic offers and an acute increase in general volatility, the Canadian dollar continues to generate family technical levels against the US dollar. The USD/CAD is still trapped near the 1,4200 area, with the price action by going and coming between key technical points.
The USD/CAD is trapped just below the 50 -day exponential mobile average (EMA) about 1,4300. However, the bulls of the Loonie still cannot push the offers below the 200 -day EMA about 1,4100, letting the price fluctuate between the two main mobile socks.
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.
