- The dollar can increase due to the fresh definitions of US President Donald Trump.
- The latest FOMC meeting report has stressed the need for more time to assess multiple factors before considering any price amendments.
- Canada Bank may rethink its approach to relieving policy after inflation data in January indicated that there is an ascending trend.
USD/CAD It is still fixed after two consecutive days of gains, as it trades about 1.4230 during the Asian hours on Thursday. The budget of the husband is due to concerns about the customs tariff from US President Donald Trump, who confirmed that the customs tariff by 25 % on drugs and semi -conductors will become valid in April. In addition, Trump reaffirmed that the car tariff will remain by 25 %, which escalates global trade tensions.
The market participants are now focusing on the key American economic dataIncluding weekly fairly fair claims, CB Economic Pioneer and Philly feeding The manufacturing index is scheduled to be issued during the North American session.
The FOOC Open Market Committee (FOMC) confirmed the minutes of the January Policy meeting, which was published on Wednesday, again the decision to maintain interest Rates It did not change in January. Politics makers emphasized the need for more time to assess economic activity, labor market trends and inflation before considering any amendments to a price. The committee also agreed that clear signs of low inflation are necessary before the price cuts are implemented.
Tuesday data showed that the Bank of Canada may reconsider the dilution policy after inflation data in January showed an increase. The main CPI enlargement in Canada increased to 1.9 % on an annual basis, compatible with expectations and increase from the previous 1.8 %. Meanwhile, the essence BOC CPI enlargement to 2.1 % on an annual basis, an increase of 1.8 %, which represents the fastest pace in almost a year.
After issuing the consumer price index, the market expectations decreased to reduce the average rate of 25 Basis at the BOC policy meeting on March 12 to less than 30 %. “There is a lot of inflationary pressure in Canada to justify the policy of the central bank that aims to inflate more,” wrote Derek Holt from Scottabank.
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.
2025-02-20 03:13:18