- The weakest dollar/CAD after reports that Canada may face the lowest level in US tariffs on April 2.
- While President Trump is considering a three -level tariff system, some sources indicate that this approach is not yet official.
- The ruler of the Federal Reserve, Adriana Kogler, reiterated that the monetary policy of the Federal Reserve Mobilization is still bound and appropriate.
The US dollar/CAD runs the loss chain in the third consecutive session, hovering near 1.4270 during the Asian trading hours on Wednesday. The husband’s decline is driven by the strengthening of the Canadian dollar (CAD) after reports from the “Toronto Star”, indicating that Canada may face the lowest level in the American definitions on April 2.
US President Donald Trump is said to weigh a three -level tariff system, although some sources indicate that this approach was not official. However, it is in line with the government’s expectations for the next week.
In addition, CAD benefits from the high oil prices, with the support of supply fears amid the escalating Middle East tensions and a more clear decrease in the American crude stock. The price of oil in West Texas (WTI) remains in a positive area for the third consecutive day, trading about $ 69.10 a barrel at the time of writing this report.
However, the negative aspect of the CAD pair can be limited as the US dollar (the US dollar) acquires support with the market warning before the announcement of US President Donald Trump’s tariff on April 2. The US dollar index (DXY), which tracks the US dollar against six major currencies, has regained its latest losses from the previous session and is circulating about 104.30 in writing.
In addition, Greenback finds support from Hawkish’s comments by the Federal Reserve Governor Adriana Kogler. On Tuesday, Kugler stressed that the FBI’s interest rate policy is still restricted and good. Kugler also noticed that the progress of the inflation goal by 2 % has slowed since last summer and described the last increase in enlargement of goods as “unhelpful”.
Questions and answers in Canadian dollars
The main factors that lead the Canadian dollar (CAD) are the level of interest rates set by the Bank of Canada (BOC), the price of oil, the largest export in Canada, the health of its economy, inflation and commercial balance, which is the difference between the value of exports in Canada in exchange for its imports. Other factors include market morale-if investors are eating more risky assets (risk) or searching for safe materials (risk)-with positive CAD risks. As its largest commercial partner, the health of the American economy is also a major factor that affects the Canadian dollar.
Canada Bank (BOC) has a major impact on the Canadian dollar by determining the level of interest rates that banks can persuade each other. This affects the level of interest rates for everyone. The main goal of BOC is to keep inflation by 1-3 % by setting interest rates up or down. Relatively higher interest rates tend to be positive for CAD. Canada Bank can also use quantitative dilution and tighten it to influence credit conditions, with previous CAD negative and the other positive CAD.
The price of oil is a major factor that affects the value of the Canadian dollar. Petroleum is the largest export in Canada, so the price of oil tends to an immediate effect on the CAD value. In general, if the price of oil rises, the CAD rises, with the increased total demand for the currency. The opposite is the case if the price of oil decreases. The high oil prices also tend to increase the possibility of a positive commercial balance, which also supports CAD.
While inflation was always believed to be a negative factor of the currency because it reduces the value of money, the opposite was already the case in the modern era with the relaxation of capitalist controls across the border. Top inflation tends to lead the central banks to raise interest rates that attract more capital flows from global investors looking for a profitable place to keep their money. This increases the demand for the local currency, which in the case of Canada is the Canadian dollar.
Victory of macroeconomic data evaluates the health of the economy and can have an impact on the Canadian dollar. Indicators such as GDP, manufacturing, PMIS, employment services, and consumer morale surveys can affect CAD direction. The strong economy is useful for the Canadian dollar. Not only attracts more foreign investments, but it may encourage Canada Bank to set interest rates, which leads to a stronger currency. If economic data is weak, CAD is likely to fall.
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