- The USD/CAD may have faced a decline as the US dollar weakens, may -can -that -to -to -grow trade tensions.
- President Donald Trump's proposal to establish a 100% tariff for foreign films has increased fear of renewed protectionist policies.
- The Canadian dollar is recovered in accordance with other G10 currencies supported by fading recession problems.
The USD/CAD keeps Monday evenly evenly at 1.3800, after the decline in the previous day of trading. The pair of upside down may be limited as the US dollar (USD) is facing pressure that may be due to the upgraded trade voltage. President Donald Trump announced the plan to guide a US trade representative and trade department to initiate a 100% tariff for foreign films.
The US Dollar Exle (DXY), which monitors Greenback against the six main currencies, is on the foot of another straight day, trading near 99.70 while writing. Market participants turn their focus on the upcoming US ISM services PMI data to obtain additional tips on the economic outlook.
President Trump confirmed that he did not intend to replace Jerome Powell, Federal Reserve Manager Jerome Powell, before his term of office. Despite the fact that calling Powell is “completely rigid”, Trump repeated his opinion that interest rates should be finally cut.
On the Labor Front, the April's Non -Farmi Payroll (NFP) report was surprised by 130,000 jobs with 177,000 jobs. This was followed by an increased increase in 185,000 in March. The unemployment rate remained permanently 4.2%, while the average hourly income increased by 3.8% compared to the previous month.
In the meantime, the Canadian Dollar (CAD) found support in alleviating the recession problems in addition to other G10 currencies. In March, Canada's GDP showed modest growth in March, despite the decline in raw prices and fears related to the potential trade dispute. Economic durability has helped to strengthen the mind of CAD.
Canadian dollar
Canadian dollars (CAD) leading factors are the level of interest rates in the Canadian Bank (BOC), oil price, Canada's highest export, economic health, inflation and trade balance, which is the difference between Canadian export value versus its imports. Other factors include market-state investors accept more risky assets (risk-on) or looking for safe havens (risk-field)-CAD positive. As its largest trading partner, the health of the US economy is also a key factor that influences Canadian dollars.
The Canadian Bank (BOC) significantly influences Canadian dollars by setting the level of interest rates that banks can borrow to each other. This affects the level of all interest rates. The main purpose of BOC is to maintain inflation of 1-3%by adjusting interest rates up or down. Relatively higher interest rates tend to be positive about CAD. The Canadian Bank can also use quantitative alleviation and tightening with the former CAD-negative and CAD-positive CAD positive.
Oil price is a key factor that affects the value of the Canadian dollar. Oil is the largest export in Canada, so oil prices tend to affect the value of CAD immediately. In general, as the price of petroleum rises, the CAD rises, the total demand of the collection is increased. If the price of oil falls, the opposite is the opposite. Higher oil prices also cause a higher positive trade balance, which also supports CAD.
If inflation was traditionally considered to be a negative factor in the currency, as it lowers the value of money, the opposite has been the opposite of the relaxation of cross -border capital controls today. Higher inflation tends to set up interest rates in central banks that attract more capital inflow to global investors looking for a profitable place to keep their money. This increases the demand for the local currency, which in Canada is Canadian.
Macroeconomic data release the health of the economy and can affect Canadian dollars. Such indicators such as GDP, production and service PMI, employment and consumer emotion studies can all affect the CAD direction. A strong economy is good for the Canadian dollar. Not only does it attract more foreign investment, it can encourage Canadian bank to put interest rates that lead to a stronger currency. If economic data is weak, CAD is likely to fall.
