Loonie on Fire! U.S. Dollar Tries to Recover from Deep Fall
The U.S. dollar (USD) has started to rise again against the Canadian dollar (CAD) after falling to its lowest level in seven months. The USD/CAD pair is now moving towards a key level near 1.3760.
This comes after the Canadian dollar got stronger last week. The reason was Canada’s better-than-expected economic data. In March, retail sales in Canada went up by 0.8%, and early data shows a 0.5% rise in April. Also, inflation in Canada stayed higher than expected. Because of this, many traders think the Bank of Canada might not cut interest rates in June and could keep them steady at 2.75%.
At the same time, the U.S. dollar is under pressure. There are worries about a new tax and spending plan in the U.S. that might raise the country’s debt a lot. Investors fear this could cause more inflation and hurt the U.S. economy, which is making the dollar less attractive.
For now, the USD/CAD pair is trading around 1.3712. The Canadian dollar is still strong, thanks to solid economic performance.
Impact : If Canada’s economy keeps doing well, the Canadian dollar could stay strong, and interest rates may remain high. The U.S. dollar might stay weak if debt concerns continue.