- The USD/CAD drops to about 1,3720 while the US dollar has fallen dramatically.
- US President Trump threatens to say goodbye to Powell from the Fed.
- The risks that inflation is maintained below the goal of 2% of the BOCs have raided the way for cuts in interest rates.
The USD/CAD led to about 1,3718 during Thursday’s Asian negotiation hours. The Loonie pair quotes slightly down, while the US dollar (USD) falls dramatically since the president of the United States (USA) Donald Trump has reiterated threats to fire the president of the Federal Reserve (Fed), Jerome Powell. The scenario reflects that the Canadian dollar (CAD) is also under pressure.
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 weakest currency against pound sterling.
| USD | EUR | GBP | JPY | CAD | Aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.17% | -0.32% | -0.22% | -0.06% | -0.20% | -0.13% | -0.10% | |
| EUR | 0.17% | -0.09% | -0.12% | 0.14% | 0.01% | 0.04% | 0.10% | |
| GBP | 0.32% | 0.09% | 0.00% | 0.23% | 0.11% | 0.16% | 0.19% | |
| JPY | 0.22% | 0.12% | 0.00% | 0.20% | 0.07% | 0.09% | 0.16% | |
| CAD | 0.06% | -0.14% | -0.23% | -0.20% | -0.12% | -0.17% | -0.04% | |
| Aud | 0.20% | -0.01% | -0.11% | -0.07% | 0.12% | -0.04% | 0.08% | |
| NZD | 0.13% | -0.04% | -0.16% | -0.09% | 0.17% | 0.04% | 0.12% | |
| CHF | 0.10% | -0.10% | -0.19% | -0.16% | 0.04% | -0.08% | -0.12% |
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 US dollar index (DXY), which tracks the value of the dollar against six main currencies, reaches a new minimum of three years around 97.25.
Donald Trump raised the idea of ​​replacing Powell of the Fed after his comments in his two -day semiannual testimony before the Senate, in which he said that the Central Bank is “well positioned to wait to learn more about the probable course of the economy before considering any adjustment to our policy position.” Powell was open to the possibility that “tariffs that translate into inflation are more or less than we think.”
Meanwhile, the Canadian dollar has been at a disadvantage, since inflation remains well below the 2% target of the Canada Bank (BOC), which has increased hopes of more cuts in interest rates. The data showed on Tuesday that the general consumer price index (CPI) grew by 1.7% year -on -year, which was in line with market expectations and the previous publication. In the same vein, the underlying IPC of the BOC constantly increased 2.5%.
The USD/CAD oscillates near the 20 -day exponential (EMA) mobile average, which quotes around 1,3717, suggesting a lateral trend. The 14-day relative force (RSI) index oscillates within the range of 40.00-60.00, indicating a strong volatility contraction.
Looking ahead, an upward movement above the maximum of May 29, 1,3820 by the PAR would open the door to the maximum of May 21, 1,3920, followed by the maximum of May 15, 1.4000.
On the contrary, the asset could slide towards the psychological level of 1,3500 and the minimum of September 25, 1,3420 if it breaks below the minimum of June 16, 1,3540.
USD/CAD DAILY GRAPH
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.
