USD/CAD Pair Analysis: What You Need to Know
- USD/CAD struggles to gain traction, but downside limited
- Rebounding US bond yields boost USD demand
- Weaker Oil prices undermine the Loonie
Current State of USD/CAD Pair
The USD/CAD pair is facing downward pressure for the second consecutive day, yet it manages to stay above the psychological level of 1.4000 during the Asian trading session. It’s important to exercise caution when considering further decline from this week’s peak around 1.4175-1.4180, the highest level seen since April 2020.
Factors Influencing USD/CAD Pair
- US President-elect Donald Trump’s tariff threats on products from Mexico and Canada
- Weaker Oil prices impacting the Loonie
- Resilient US economy and stalling inflation progress affecting Fed’s interest rate decisions
- Geopolitical risks favoring safe-haven assets like the USD
Market Outlook for USD/CAD Pair
Despite Thanksgiving Day in the US and the upcoming OPEC+ meeting, supporting factors suggest that the USD/CAD pair is likely to move higher. While trading volumes are thin, any downward correction could present a buying opportunity with limited downside potential.
Canadian Dollar FAQs
Key Factors Affecting the Canadian Dollar (CAD)
- Interest rates set by the Bank of Canada (BoC)
- Price of Oil, Canada’s largest export
- Health of the Canadian economy
- Inflation and Trade Balance
- Market sentiment and US economic health
Understanding these factors can provide insights into the movement of the Canadian Dollar against other currencies and help in making informed investment decisions.