USDCAD battle for 1.35 CAD
Updated
At the moment, the US dollar is once again rising against the Canadian dollar. Technical resistance is present at 1.35 CAD. This resistance will have to be overcome in order to prevent a further sideways movement. A downturn could then occur, with the level of CAD 1.34 per USD being monitored.
Note
The Canadian dollar (USDCAD) has hardly moved since March. Expectations of interest rate cuts and disappointing figures for the fourth quarter of 2018 have resulted in a higher US dollar against the Canadian dollar. However, the latest figures point to a recovery in the first quarter. There are several factors that affect the Canadian dollar, such as the oil price, the trade dispute and economic data. The increase in the price of oil in the first quarter is likely to contribute to the recovery. In addition, inflation rose to the BoC's target level of 2% from April onwards (YoY), with core inflation at 1.5%. Analysts also expect an increase in Gross Domestic Product in the first quarter. These figures will be published this Friday.
How will the BoC react?
The question is whether the Canadian central bank considers a sustainable economic recovery possible. Most analysts still suspect that the BoC will remain neutral for the time being. However, if the BoC hints at a possible rise in interest rate levels, the currency pair USD/CAD may fall rapidly.
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