- The Canadian dollar won another 0.66% on Friday.
- Market flows are leaving the dollar, pushing the loonie offers up.
- The Boc’s decision is expected for next week, markets expect to see if the Boc will continue to make last -minute feats.
The Canadian dollar (CAD) rose on Friday, jumping two thirds of one percent against the US dollar as the flows of the global market continue to leave the shelter sure represents the dollar. The pressures of the commercial war have relieved something after the Trump administration moved away from its own “reciprocal” unequal tariffs after a 90 -day last minute delay, opting for a 10% replacement tariff on all products. Together with 145% import rates on all China’s assets, the tensions of the commercial war will keep investors with one eye in geopolitical holders in the predictable future.
The Canada Bank (BOC) is ready to announce its last decision of fees next week, and the key inflation figures of the Canadian consumer price index (IPC) will also be published next Tuesday. The pressure is on the BOC while the markets expect to see if they will maintain the changes in the rates for the moment after a long series of cuts, or if the governor of the BOC, Tiff Macklem, will try to make a more cut before the economic impacts of the US tariffs begin to affect the Canadian economy.
What moves the market today: the Canadian dollar rises for the weakness of the dollar
- The Canadian dollar rose to a maximum of 22 weeks against the US dollar on Friday.
- Tariff tensions and trade war remain high, but markets continue to incline them back to the appetite for risk.
- The key US data showed a new drop in the US Producer Price Index (IPP) in March, but tariffs could shorten that progress.
- The feeling figures of the consumer in the US have also collapsed, and US consumers also expect both short and long -term inflation to trigger, also thanks to tariffs.
- The inflation of the Canadian CPI will be published next Tuesday, which could inform the next decision of BOCs, scheduled for the following Wednesday.
Prognosis of the price of the Canadian dollar
The profit of 0.66% of the Canadian dollar on Friday has dragged a weekly loss of 2.3%, and has accelerated to its fifth consecutive loss week by week as the Loonie is strengthened by a general weakening in the demand of the dollar in the market. The USD/CAD has crossed the 200 -day exponential (EMA) mobile average in 1,4072, putting the way on prolonged falls.
On the upward side, the technical oscillators are showing over -sales warning signals in the USD/CAD as the minimum explore torque of several months below the 1,3900 area. The short -term price action runs the risk of running in old technical oscillation points located between 1,3800 and 1,3900 during the two intermediate quarters of 2024.
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.
