The Canadian dollar continues to ride green to its highest level
- The Canadian dollar has found more gains off the pressure of the US dollar sale.
- Lack of Canadian economic data is meaningful means that LONIE’s gains are at the mercy of market flows.
- The geopolitical tensions in the Middle East have returned, while maintaining the appetite of the risk under the winding, but the prices of crude oil are enhanced.
The Canadian dollar (CAD) caught another offer on Friday, as it climbed to the highest level in the eight months, as the US dollar (USD) is placed in its place and the high prices of crude oil. Geopolitical tensions have returned after Israel launched a sudden attack on Iranian nuclear installations late Thursday, prompting investors to get rid of their perch, albeit a little. The numbers of American consumer feelings flushed over last month, which increased the negative momentum in public investor morale.
Canadian data is still limited to the economic list in the next two weeks. LONIE traders will be cautious to the main Canadian inflation numbers due at the end of the month; However, the data vacuum from time to time leaves love fully at the mercy of how the markets feel the Greenback Middle East from day to day.
Digest Market Mark: Steps from the Canadian dollar higher, supported by the crude oil stadium
- The Canadian dollar caught a batch of the effects of the striking market, as it rose to the highest rise in crude oil prices after the Israeli air strike on Iranian nuclear establishments.
- The effects of the USD/CAD pair were sent to the 1.3600 handle for the first time since last October, while keeping Greenback to eight months installed against LONIE.
- The consumer morale index numbers for the University of Michigan in May has been stronger than the expected intermediate market expectations.
- The consumer’s perception of economic factors, especially negative factors, routinely located, and often running out of steam before the negative effects really feel the wider economy. The negative perceptions of the Trump administration’s perceptions are likely to be differently different.
- Federal Reserve Prices (FERED) is scheduled to deserve next week, but it is widely expected to lead to another comment on interest rates as policy makers at the Federal Reserve are still cautious about negative shocks of Donald Trump’s tariff.
- Another rate of prices is likely to attract more criticism from the White House, but the markets have already been priced at the next rate in September.
Canadian dollar expectations
The Canadian dollar continues to obtain land against Greenback, due to external factors instead of any fundamental force. The CAD continues to run on the low side of the low trend lines of its highest levels at the beginning of the year published at the beginning of the year, although the unilateral momentum can be ready to move a correction with the artistic fluctuations buried deeply in the excessive work lands.
Daily Plan USD/CAD
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.