- The USD/CAD extends the fall to around 1,3585 in the first Asian session on Thursday.
- The US private payrolls in June fell for the first time in two years.
- The US non -agricultural payroll report will be at the Center for Care later on Thursday.
The USD/CAD pair quotes in negative territory about 1,3585 during the first Asian session on Thursday. The US dollar (USD) is still under sale pressure in the midst of growing concerns about US debt, uncertainty in tariff policies and increased betting bets for interest rates. The US non -agricultural payroll report will take prominence later on Thursday.
Investors are concerned about the massive tax and expenses bill of US President Donald Trump, who could add 3.3 billion additional national debt. The growing tax concerns have decreased optimism and have weighed over the USD against the Canadian dollar (CAD).
In addition, the private payrolls of the US fell in June for the first time in more than two years, pointing out possible winds against in the next employment report and contributing to the fall of the US dollar. The data published by Automatic Data Processing, Inc. (ADP) on Wednesday showed that private sector payrolls decreased by 33,000 in June after a decreased downward increase in 29,000 in May. This figure was below the market consensus of 95,000.
All eyes will be put in US employment data for June on Thursday. Economists expect Thursday’s data to show that non -agricultural payrolls increase in 110,000 in June. In addition, the unemployment rate will be published, the purchasing managers index (PMI) of ISM services and the initial weekly applications of unemployment subsidy.
However, a fall in crude oil prices could weaken the Loonie linked to raw materials and help limit torque losses. It is worth noting that Canada is the largest oil exporter to the US, and the lowest prices of crude oil tend to have a negative impact on the value of the CAD.
Canadian dollar – frequent questions
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.
