While it is widely expected that the Bank of Canada maintains its policy, it is the commercial tensions between the United States and Canada and the result of the elections in the end of April in Canada that can shape the path of the CAD. With the concerns about the growth of the United States persisting and new tariff risks on the horizon, the USD/CAD remains vulnerable, says the Currency analysts of ING, Francesco Pesole and Chris Turner.
The USD/CAD premium persists before a weak economic scene in the US.
“We are publishing this note the day when the Bank of Canada announces its policy, and we hope to keep its position. That does not have great implications for the USD/CAD.”
“The Fed-Boc gap has only moved around 20 basic points in favor of the CAD in April, which is not enough to justify a USD/CAD below 1.40. But our opinion is that the USD will continue to discuss weak growth expectations for longer, which can justify the USD risk premium.”
“The direction of the commercial relationship between the US and Canada will be the main determinant of CAD movements in the future. Canada will choose a new government at the end of April; the liberal leader Mark Carney is slightly ahead in the surveys. Whoever wins promises to fight Trump in trade, and the risks of threatening new tariffs before the complicated negotiations of the T-Mec risk of corrections. “
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
