- The USD/CAD clings to profits about 1,3920 while the US dollar serves strongly.
- The Fed has indicated that there is no hurry for cuts in interest rates.
- The Boc warned that Trump tariffs have raised risks to financial stability.
He USD/CAD It maintains the profits obtained on Thursday around 1,3920 during the European negotiation hours on Friday. The pair of the Canadian dollar serves strongly as the US dollar (USD) is strengthened by multiple winds in favor.
At the time of writing, the American dollar index (DXY), which tracks the value of the dollar against six main currencies, goes from a maximum of almost a month of 100.85 to about 100.40, but has risen more than 1% in the last two days of negotiation.
He US dollar It was strengthened since the Federal Reserve (FED) pointed out in the Wednesday’s monetary policy announcement that there is no hurry for cuts in interest rates, given the high uncertainty due to the new economic policies announced by the President of the United States (USA) Donald Trump. Another reason behind the firmness of the US dollar is the announcement of the commercial agreement between the US and the United Kingdom (UK).
Meanwhile, investors expect commercial discussions between the US and China, which are confirmed in Switzerland on Saturday.
In the Canadian region, the annual financial stability report of the Bank of Canada (BOC) showed on Thursday that the commercial war led by Trump raises “risks to financial stability”. The report also showed concerns about “non -compliance with households and companies.”
The USD/CAD wins strongly after a rupture of the graphic pattern of descending wedge formed in a temporary frame of four hours. Historically, a descending wedge rupture establishes the scenario for a bull reversal. The par extends its rise above the exponential (EMA) mobile average of 20 periods, which is around 1,3860, indicating that the short -term trend has become bullish.
The relative force index (RSI) of 14 periods rises abruptly to about 66.00, suggesting a strong bullish impulse.
More increases towards the minimum of April 9, 1,4075, followed by the minimum of April 8, 1,4272, they would appear if the PAR extends its recovery above the psychological level of 1.4000.
In an alternative scenario, a downward movement below the psychological support of 1,3500 and the minimum of September 24, 1,3430 seems likely if the pair breaks below the round level of 1,3600.
Four hours of USD/Cad
US dollar FAQS
The US dollar (USD) is the official currency of the United States of America, and the “de facto” currency of a significant number of other countries where it is in circulation along with local tickets. According to data from 2022, it is the most negotiated currency in the world, with more than 88% of all global currency change operations, which is equivalent to an average of 6.6 billion dollars in daily transactions. After World War II, the USD took over the pound sterling as a world reserve currency.
The most important individual factor that influences the value of the US dollar is monetary policy, which is determined by the Federal Reserve (FED). The Fed has two mandates: to achieve price stability (control inflation) and promote full employment. Its main tool to achieve these two objectives is to adjust interest rates. When prices rise too quickly and inflation exceeds the 2% objective set by the Fed, it rises the types, which favors the price of the dollar. When inflation falls below 2% or the unemployment rate is too high, the Fed can lower interest rates, which weighs on the dollar.
In extreme situations, the Federal Reserve can also print more dollars and promulgate quantitative flexibility (QE). The QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is an unconventional policy measure that is used when the credit has been exhausted because banks do not lend each other (for fear of the default of the counterparts). It is the last resort when it is unlikely that a simple decrease in interest rates will achieve the necessary result. It was the weapon chosen by the Fed to combat the contraction of the credit that occurred during the great financial crisis of 2008. It is that the Fed prints more dollars and uses them to buy bonds of the US government, mainly of financial institutions. Which usually leads to a weakening of the US dollar.
The quantitative hardening (QT) is the reverse process for which the Federal Reserve stops buying bonds from financial institutions and does not reinvote the capital of the wallet values ​​that overcome in new purchases. It is usually positive for the US dollar.
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.
