The US dollar/CAD extends to the upward trend over 1.3950 on the most stable US dollar after the United States and China trade talks

- The dollar/CAD earns the momentum to about 1.3975 in a session on Tuesday, Asian.
- Reducing trade tensions between the United States and China raising the US dollar.
- High crude oil prices may enhance LONIE and Cap The Pair Tupeed.
The pair of the dollar/CAD extends to about 1,3975 during the early Asian session on Tuesday, supported by the strongest US dollar (USD). The Canadian dollar (CAD) represented its weakest point since April 10 against Greenback since April 10 after it has gave the US -Chinese trade deal a batch.
Reducing trade tensions between the two largest economies in the world gives investors to date that US President Donald Trump is taking a softer approach than expected. This raises the hope that the American economy can avoid recession, which in turn raises the US dollar on a large scale.
“It is expected to keep its continuous strength in the DXY (US dollar index) under pressure in the next trading session,” said Karim Francis, head of the Currency Risk Management in North America, at Convera Canada ULC.
Investors now expect the US Federal Reserve (Fed) to reduce interest rates only twice in 2025. The biases associated with federal reserve meetings prefer a 25 -point reduction in September. Last week, they referred to three discounts this year, with a change that is likely to be in July.
Meanwhile, the high prices of crude oil associated with the commodity can support the budget of the husband. It should be noted that Canada is the largest oil exporter for the United States, and it tends to rise in crude oil prices to a positive impact on the CAD value.
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.