- The USD/CAD goes back and remains flat as the US dollar recovery movement has been shortened.
- The president of the USA, Trump, has expressed confidence that commercial conversations with Mexico and Japan spent without problems.
- The Boc has warned that a Prolonged global trade war could push the economy to a deep recession.
The USD/CAD pair yields its intradic earnings and goes back to about 1,3860 during negotiation hours in North America on Thursday. The Loonie pair goes back as the intradic earnings in the US dollar (USD) have been reduced, despite the fact that US president Donald Trump said that Washington is achieving a decent progress in the closure of bilateral agreements with Japan and Mexico.
The US dollar index (DXY), which tracks the value of the dollar against six main currencies, falls slightly from its maximum intra -estate of 99.60 to about 99.45.
“I had a very productive call with the president of Mexico yesterday. Likewise, I met with the highest level commercial representatives of Japan. It was a very productive meeting. Each nation, including China, wants to meet! Today, Italy! The president of the United States, Donald Trump, wrote on a publication on the Truth. Social at the end of the European negotiation hours on Thursday.
On Wednesday, the Bank of Canada (BOC) maintained stable interest rates by 2.75%, as expected, and warned that a possible increase in inflation due to a potential global commercial war led by Trump could push the economy to a “deep recession.” The BOC did not publish its economic prognosis, but provided two scenarios in the midst of uncertainty about how Trump’s tariff policy will shape Canadian economic perspectives.
In the first scenario, if most tariffs are negotiated, Canadian and global growth would weaken temporarily. Inflation could fall to 1.5% for a year and then return to the goal of 2% of the Central Bank.
In the second scenario, a prolonged global commercial war will push the economy to a significant recession, and inflation will shoot over 3% in mid -2026 before returning to 2%.
US dollar FAQS
The US dollar (USD) is the official currency of the United States of America, and the “de facto” currency of a significant number of other countries where it is in circulation along with local tickets. According to data from 2022, it is the most negotiated currency in the world, with more than 88% of all global currency change operations, which is equivalent to an average of 6.6 billion dollars in daily transactions. After World War II, the USD took over the pound sterling as a world reserve currency.
The most important individual factor that influences the value of the US dollar is monetary policy, which is determined by the Federal Reserve (FED). The Fed has two mandates: to achieve price stability (control inflation) and promote full employment. Its main tool to achieve these two objectives is to adjust interest rates. When prices rise too quickly and inflation exceeds the 2% objective set by the Fed, it rises the types, which favors the price of the dollar. When inflation falls below 2% or the unemployment rate is too high, the Fed can lower interest rates, which weighs on the dollar.
In extreme situations, the Federal Reserve can also print more dollars and promulgate quantitative flexibility (QE). The QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is an unconventional policy measure that is used when the credit has been exhausted because banks do not lend each other (for fear of the default of the counterparts). It is the last resort when it is unlikely that a simple decrease in interest rates will achieve the necessary result. It was the weapon chosen by the Fed to combat the contraction of the credit that occurred during the great financial crisis of 2008. It is that the Fed prints more dollars and uses them to buy bonds of the US government, mainly of financial institutions. Which usually leads to a weakening of the US dollar.
The quantitative hardening (QT) is the reverse process for which the Federal Reserve stops buying bonds from financial institutions and does not reinvote the capital of the wallet values ​​that overcome in new purchases. It is usually positive for the US dollar.
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.
