- The USD/CAD rises after the US President Trump sends a letter to Canada, dictating a tariff rate of 35%.
- Trump also considers increasing the general tariff rate from 10% to “15% or 20%”.
- Investors expect data from the Canadian labor market for June.
The USD/CAD pair yields some of its initial profits during Friday’s European trading session. Even so, the Loonie parishes firmly close to the key level of 1,3700. The pair is strengthened as the Canadian dollar (CAD) serves below the expected on all fronts, after the imposition of tariffs of 35% of the United States (USA) to Canada, separated from sectoral taxes.
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 the Australian dollar.
| USD | EUR | GBP | JPY | CAD | Aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.05% | 0.20% | 0.37% | 0.24% | -0.10% | 0.15% | -0.03% | |
| EUR | -0.05% | 0.14% | 0.31% | 0.18% | -0.08% | 0.10% | -0.09% | |
| GBP | -0.20% | -0.14% | 0.20% | 0.03% | -0.20% | -0.00% | -0.25% | |
| JPY | -0.37% | -0.31% | -0.20% | -0.11% | -0.47% | -0.24% | -0.42% | |
| CAD | -0.24% | -0.18% | -0.03% | 0.11% | -0.29% | -0.10% | -0.28% | |
| Aud | 0.10% | 0.08% | 0.20% | 0.47% | 0.29% | 0.31% | -0.00% | |
| NZD | -0.15% | -0.10% | 0.00% | 0.24% | 0.10% | -0.31% | -0.23% | |
| CHF | 0.03% | 0.09% | 0.25% | 0.42% | 0.28% | 0.00% | 0.23% |
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).
On Thursday, US President Trump sent a letter to Canada, specifying tariff rates, which will come into force as of August 1. The letter also indicated that the highest tariff rate includes a lien about the fentanyl, which Trump imposed to Canada after returning to the White House due to the income of drugs into the US economy.
However, President Trump has assured that he would consider adjustments in tariff rates if the nation cooperates in restricting drug flow.
In addition, the US President Trump has also threatened to increase the general tax of 10% to “15% or 20%” and is prepared to send a letter, dictating tariff rates, to the European Union (EU) sooner.
Meanwhile, the US dollar (USD) firmly quotes after the new tariff threats of Donald Trump, sending the US dollar index (DXY) up to 97.90.
In Friday’s session, investors will focus on Canadian labor market data for June, which will be published at 12:30 GMT.
The USD/CAD strives to break the three -day range between 1,3638 and 1,3710 upwards. The pair continues to oscillate around the 20 -day exponential (EMA) mobile average, which quotes about 1,3670.
The 14 -day relative force (RSI) index remains around 50.00, indicating that the torque lacks impulse in any direction.
Facing the future, an upward movement above the maximum of May 29, 1,3820 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
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.
