- The dollar is bounced after a strong recovery in the US dollar.
- Investors ignore the weak PING S & P Global PMI data for February.
- Investors turn into caution about the Canadian dollar expectations (CAD), as President Trump reviews the customs tariff by 25 % on Canada.
The pair of the dollar/CAD returns to approximately 1.4220 in European trading hours on Monday after slipping to approximately 1.4180 earlier in the day. LONIE’s pair is recovered as USD (USD) is almost completely lost, as the US dollar index (DXY) returns to approximately 106.60.
The US dollar index is acquired where weak investors digest the United States (United States) PMI Global Services for February, which showed that activities in the service sector were amazingly contracted for the first time 25 months.
Meanwhile, fears of 25 % of the definitions of Canada are waved by US President Donald Trump. President Trump has postponed his plans to impose a 25 % tariff on Canada and Mexico for one month on February 4 after the two countries agreed to cooperate in the field of criminal enforcement on the border.
On the Monetary Policy Front, TIFF Macklem, in a speech in Ontario on Friday, warned that the economic impact would be severe if Trump slapped the tariff on all imports from Canada.
The US dollar/CAD is trading in a descending triangular style formed on an hourly time frame. The descending boundaries of the above -mentioned pattern are drawn from the highest level on February 9 of 1.4380 and the flat border is placed from the level of February 14 at 1.4151.
The 20 -point SIA moving average interferes with the LONIE price, indicating the presence of a side direction.
The relative strength index trades 14-periods (RSI) within the scope of 40.00-60.00, indicating lack of caution among investors.
The couple remained in the declining direction since the first trading day in February and could see more from the negative aspect if it has decreased less than the level of February 14 at 1.4151 and moves towards the lowest level on December 9 of 1.4094, followed by December 6 at 1.4020.
On the contrary, the bullish move above the highest level on February 19 of 1.4246 will open the door towards the round resistance of 1.4300 and February 9 of 1.4380.
USD/CAD graph every hour
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.
Source: https://www.fxstreet.com/news/usd-cad-price-forecast-bonces-back-as-us-dollar-covers-entire-netaday-losSes-20250241105