- The USD/CAD fell sharply to nearly 1.4420 as Canadian Prime Minister Trudeau announced retaliatory tariffs in the US.
- On Monday, the US president confirmed 25% tariffs in Canada and Mexico.
- The US dollar faces sharp sales pressure as FRED DOVISH bets swell.
The USD/CAD pair sharply corrects from the monthly high of 1.4542 posted on Monday to close to 1.4420 European trading hours on Tuesday. The Rooney pair falls as the Canadian dollar (CAD) is superior all over the board after Canadian Prime Minister Justin Trudeau announces retaliation fees in the US (US).
Canadian Dollar Prices Today
The table below shows the rate of change in the Canadian Dollar (CAD) for today's listed major currencies. The Canadian dollar was the strongest against the US dollar.
| USD | EUR | GBP | JPY | CAD | aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.34% | -0.15% | -0.48% | -0.54% | -0.08% | -0.22% | -0.59% | |
| EUR | 0.34% | 0.19% | -0.13% | -0.20% | 0.27% | 0.12% | -0.27% | |
| GBP | 0.15% | -0.19% | -0.32% | -0.39% | 0.08% | -0.07% | -0.44% | |
| JPY | 0.48% | 0.13% | 0.32% | -0.06% | 0.40% | 0.25% | -0.12% | |
| CAD | 0.54% | 0.20% | 0.39% | 0.06% | 0.46% | 0.33% | -0.06% | |
| aud | 0.08% | -0.27% | -0.08% | -0.40% | -0.46% | -0.14% | -0.53% | |
| NZD | 0.22% | -0.12% | 0.07% | -0.25% | -0.33% | 0.14% | -0.38% | |
| CHF | 0.59% | 0.27% | 0.44% | 0.12% | 0.06% | 0.53% | 0.38% |
The heatmap shows the rate of change of each other's major currencies. The base currency is selected from the left column, and the estimated currency is selected from the top row. For example, if you select Canadian dollars from the left column and move along the horizon to US dollars, the percentage of change shown in the box represents CAD (base)/USD (quotation).
Canada's Justin Trudeau has announced that if US tariffs come into effect, Canada will immediately impose a 25% tariff on US imports worth $30 billion. Trudeau added that tariffs on the remaining $125 billion product will “come into effect in 21 days.” Reuters report.
On Monday, US President Donald Trump confirmed that he would impose a 25% tariff on Canada and Mexico. “There are no rooms left in Mexico or Canada,” Trump told reporters. He added: “Customers – you know, they're all set up. They'll come into effect tomorrow.”
Meanwhile, the US dollar (USD) is slowing down as traders are increasingly confident that they can cut interest rates at their June meeting. The US Dollar Index (DXY), which tracks the value of greenbacks for six major currencies, will decrease to approach an 11-week low of 106.15.
Fed Dovish bets escalated as the US (US) core personal consumption expenditure price index (PCE) data for January, the initial decline in personal spending data for January, the sharp decline that significantly lowered PMI data for February, and the February PMI data for February.
Canadian Dollar FAQ
The key factors driving the Canadian Dollar (CAD) are the interest rate levels, which are the price of Canada's largest exports, economic health, inflation and trade balance. Other factors include market sentiment, whether investors are taking on a more risky asset (risk-on) or seeking a safe haven (risk-off), whether the risk-on is CAD-positive. As our biggest trading partner, the health of the US economy is also an important factor affecting the Canadian dollar.
The Bank of Canada (BOC) has a major impact on the Canadian dollar by setting the level of interest rates that banks can lend to each other. This affects the interest rate level for everyone. The main goal of the BOC is to keep inflation at 1-3% by adjusting interest rates up and down. A relatively high interest rate tends to be positive for CAD. The Bank of Canada can also use quantitative mitigation and tightening to influence credit terms along with previous CAD negatives and the latter CAD positives.
Oil prices are an important factor that influences the value of the Canadian dollar. As oil is Canada's largest export, oil prices tend to have an immediate impact on CAD values. Generally, as aggregate demand for a currency increases, so does CAD if oil prices rise. If oil prices drop, the opposite is true. Rising oil prices also tend to increase the likelihood of a positive trade balance in favor of CAD.
Inflation was traditionally considered a negative factor in currency, but in reality it was opposed in modern times with the relaxation of capital controls across borders, as it reduces the value of money. The higher the inflation rate, the more likely it will lead central banks to raise interest rates, which will increase capital inflows from global investors seeking a favorable place to keep their money. This increases the demand for the local currency, which is Canadian dollars, in Canada.
Macroeconomic data assesses the health of the economy and may affect the Canadian dollar. Indicators such as GDP, manufacturing and services PMI, employment, and consumer sentiment surveys can all affect the direction of CAD. A strong economy is good for the Canadian dollar. Not only will it attract more foreign investment, it may also encourage Canadian banks to raise interest rates, leading to stronger currency. However, if economic data is weak, CAD can drop.
