- USD/CAD appears at risk near 1.4350, where the US dollar is trading before the Federal Reserve Policy on Wednesday.
- The Federal Reserve Certainly maintains fixed interest rates in the range of 4.25 % -4.50 %.
- Investors are awaiting US retail sales and Canadian consumer price index data for February.
The pair of the dollar/CAD is struggling to get a floor near the lowest three -day level at 1.4360 in European trading hours on Monday. LONIE’s pair is trading with caution as the US dollar (USD) faces pressure before the Federal Reserve Monetary Reserve Decision (Fed) on Wednesday. The US dollar index (DXY), which tracks the value of Greenback for six main currencies, is trading to approximately 103.55.
Investors expect the Federal Reserve will maintain fixed interest rates in the range of 4.25 % -4.50 % for the second time in a row. Federal reserve officials were directing that borrowing rates should remain at their current levels so that they can clarity over new economic policies by US President Donald Trump.
In today’s session, investors will focus on US retail sales data for February, which will be published at 12:30 GMT. Monthly retail sales data, a main measure of consumer spending, is estimated at 0.75 after contracting by 0.9 % in January.
Meanwhile, the Canadian dollar (CAD) will be affected by the consumer price index data (CPI) for February, which will be published on Tuesday. It is estimated that the main consumer price index has grown by 2.1 % in 12 months to February, faster than the increase of 1.9 % in January. The acceleration in price pressures will constantly reduce the risk of inflation.
The USD/CAD maintains the 100 EMA moving average, which is about 1.4220, indicating that the total trend is upward.
The 24-decrease (RSI) swings in a range of 40.00-60.00, indicating a side direction.
To move forward, the upper trend movement will open the highest level on March 10 of 1.4470 the door toward the 1.4500 psychological resistance and the height of January 30 at 1.4595.
On the contrary, the collapse without a decrease in February 14 at 1.4151 by the husband would expose him to the lowest level on December 9 of 1.4094, followed by a decrease in December 6 at 1.4020.
Daily Plan USD/CAD
Questions and answers in US dollars
The USD (USD) is the official currency of the United States of America, and a “reality” currency for a large number of other countries where there is a circulating alongside local notes. It is the most trading currency in the world, as it represents more than 88 % of the rotation of global foreign currencies, or on average $ 6.6 trillion in transactions per day, according to data from 2022. In the aftermath of World War II, the United States took over the British pound the world reserves. For most of its history, the US dollar was backed by gold, even the Bretton Woods agreement in 1971 when the golden standard went.
The most important individual factor that affects the value of the US dollar is the monetary policy, which is formed by the Federal Reserve (Fed). The Federal Reserve has two states: to achieve price stability (control of control) and enhance full employment. Its primary performance to achieve these two goals is to adjust interest rates. When prices rise very quickly and inflation is 2 % higher than the Federal Reserve goal, the Federal Reserve will raise rates, which helps the value of the dollar. When inflation decreases to less than 2 % or the unemployment rate is very high, the Federal Reserve may reduce interest rates, which weighs to green.
In maximum situations, the Federal Reserve can also print more dollars and quantitative mitigation (QE). QE is the process that the Federal Reserve increases significantly from the flow of credit in a suspended financial system. It is a measure of the non -standard policy used when the credit is dry because banks will not lend to each other (for fear of failing to pay the opposite end). It is the last resort when it is unlikely to achieve interest rates simply the necessary result. The Federal Reserve is the preferred to combat the credit crisis that occurred during the great financial crisis in 2008. The Federal Reserve Printing includes more than dollars and their use to buy US government bonds mostly than financial institutions. QE usually leads to the weakest US dollar.
The quantitative tightening (QT) is the opposite process in which the Federal Reserve stops buying bonds from financial institutions and does not invest the manager from the bonds he holds in new purchases. It is usually positive for the US dollar.
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