- The Canadian dollar fell to its lowest value in more than two decades.
- Canada immediately fell against the Trump import tariff with its export tariff.
- The markets have supervised the sale of lovee, but CAD is still at its lowest level in several years.
The Canadian dollar (CAD) fell to its lowest offers against the US dollar (USD) in 21 years at the beginning of the trading week after the United States and Canada went to the commercial tariff that will crush the main aspects of both economists. The morale in the market in general was restored after Mexico managed to negotiate a one -month ceasefire on the American targets targeting the merchandise imported from Mexico, but LONIE is still testing its lowest offers since 2020.
The United States imposed a 25 % flat import tariff on all goods crossing the border from Canada during the weekend, although US President Donald Trump has been put pressure to reduce definitions of crude oil from Canadian sources to 10 %. Canada immediately responded to its own export taxes on the goods and energy sold to the United States, which dares President Trump to pursue his threat to double import fees for Canadian goods if Canada takes out of his definitions. According to some analysts, another 0.7 % trading spitting can add to the basic demand led by demand in the United States.
Daily Digest Market Movers: Trade War 2.0 where the United States performs its own business bills
- The Canadian dollar reached 1.4800 against the US dollar for the first time in more than two decades.
- The markets have regained their foot, but the US dollar/CAD is still tested at its highest level in the epidemic, as the market morale maintains the Greenback offer.
- One presidency was granted to the US tariff for Mexico as Mexican President Claudia Shinbum, he agreed to trade negotiations with the Knights Corps from President Trump with very important jobs but a few practical experience. Canada chose to take revenge for export fees on the same goods that the United States will impose import taxes on.
- President Trump promised to double the definitions if Canada or Mexico had criticized.
- Donald Trump’s tariff is widely expected to define the Canadian economy, as well as contribute to the unemployed in the United States and contribute to a useful contribution to American inflation measures.
- Inflation and a possible rise in US crude oil costs is a bad way to obtain price discounts from Federal Reserve (Fed).
Canadian dollar price expectations
The Canadian dollar came against the stone of 1.4800 against the US dollar early on Monday before the markets were able to pump the brakes. LONIE recovered some foot after declining to its lowest level for 21 years, with synonym with a slight relief in Greenback.
The CAD is still trading in its five -year highest level near the 1.4600 handle, where Greenback is accelerating to a sixth consecutive acquisition session against LONIE. USD/CAD rose more than 10 % from bottom up from last September 1.3420.
Daily Plan USD/CAD
Questions and answers in Canadian dollars
The main factors that pay the Canadian dollar (CAD) are the level of interest rates set by Canada Bank (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 Canada’s exports 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.
