Uncertainty in interest rates US and growth in demand for CAD
The dollar is falling. The reason is the lack of confidence in raising rates in the US and the tightening of monetary policy, or its prospect, in the main banks.
Today, according to the results of the week, the US dollar lost its positions and on Wednesday reached the level of 1.1776 against EUR. At the same time, today, the dollar was able to return positions a little and now is at the level of 1.1719. The unsuccessful week for the USD is justified by the fact that the statement of the Fed on raising rates, once again, was unconvincing.
Inflation data remains below target levels of 2%, despite the fact that short-term risks for the economy are well balanced.
The speech of ECB President Mario Draghi is a strong support for the euro. He made it clear that the ECB could begin to wind down the quantitative easing program
The US dollar index, which shows the purchasing power of the dollar to the trade-weighted basket of six major currencies, is now traded at position 93.41 after dropping to 93.00.
Data for the month show that the dollar index fell by about 2%. At the same time, since the beginning of the year the decrease was 8%.
The dollar remained stable against the yen: the pair USD/JPY was trading at position 111.42, while the pound’s rate rose to 1.3157. Now, the price is at the level of 1.3143.
The Canadian dollar remained close to the maximum for 14 months against the US dollar. USD/CAD was trading at the level of 1.2444.
The Bank of Canada raised the interest rate for the first time in seven years and indicated that it plans to continue this increase in the following months. Demand for CAD began to rise.
Created by Joshua Hayn