USD/CAD hits 1.3950 on Trump’s policies and falling oil prices
Press Hub UCapital
Share:
USD/CAD continues to climb, reaching the 1.3950 level as Trump's fiscal proposals fuel demand for the U.S. Dollar. The Canadian Dollar weakens under pressure from falling Oil prices and concerns over future demand amid possible trade tensions. Market analysts believe these factors could keep the Federal Reserve from lowering rates, supporting the current USD rally.
USD/CAD Extends Gains as Trump’s Fiscal Plans Boost Dollar Demand
USD/CAD has risen for the third consecutive session, currently trading near 1.3950. Investor enthusiasm over Trump’s fiscal policies, which are anticipated to stimulate U.S. economic activity, has amplified USD demand and delayed expectations of a Fed rate cut. With Trump’s recent election victory, traders expect a spending boost that may increase inflationary pressure, influencing USD/CAD performance.
Trump’s Economic Policies Signal a More Hawkish Fed Outlook
Trump’s fiscal approach, focusing on investment and labor demand, could place upward pressure on inflation. Consequently, analysts are beginning to anticipate a more hawkish stance from the Federal Reserve. Minneapolis Fed President Neel Kashkari echoed this view on Sunday, acknowledging economic resilience but cautioning that the Fed remains committed to achieving its 2% inflation target before considering further rate cuts.
Weak Oil Prices Weigh on the Canadian Dollar
As a commodity-linked currency, the Canadian Dollar remains vulnerable to the drop in Oil prices. WTI crude is trading around $67.90, marking continued declines. Fears of reduced demand from China, especially if U.S. tariffs are implemented, add further downward pressure on Oil. Canada’s economy, heavily reliant on Oil exports to the U.S., is consequently seeing the CAD weaken, further elevating USD/CAD.
Upcoming Data: Canadian Building Permits and U.S. Inflation
Looking ahead, Canadian September Building Permits data could provide insight into domestic economic activity. Traders are also anticipating U.S. inflation data, due on Wednesday, which could reinforce the Fed’s position on rate policy and potentially drive further gains for USD/CAD.
USD/CAD Extends Gains as Trump’s Fiscal Plans Boost Dollar Demand
USD/CAD has risen for the third consecutive session, currently trading near 1.3950. Investor enthusiasm over Trump’s fiscal policies, which are anticipated to stimulate U.S. economic activity, has amplified USD demand and delayed expectations of a Fed rate cut. With Trump’s recent election victory, traders expect a spending boost that may increase inflationary pressure, influencing USD/CAD performance.
Trump’s Economic Policies Signal a More Hawkish Fed Outlook
Trump’s fiscal approach, focusing on investment and labor demand, could place upward pressure on inflation. Consequently, analysts are beginning to anticipate a more hawkish stance from the Federal Reserve. Minneapolis Fed President Neel Kashkari echoed this view on Sunday, acknowledging economic resilience but cautioning that the Fed remains committed to achieving its 2% inflation target before considering further rate cuts.
Weak Oil Prices Weigh on the Canadian Dollar
As a commodity-linked currency, the Canadian Dollar remains vulnerable to the drop in Oil prices. WTI crude is trading around $67.90, marking continued declines. Fears of reduced demand from China, especially if U.S. tariffs are implemented, add further downward pressure on Oil. Canada’s economy, heavily reliant on Oil exports to the U.S., is consequently seeing the CAD weaken, further elevating USD/CAD.
Upcoming Data: Canadian Building Permits and U.S. Inflation
Looking ahead, Canadian September Building Permits data could provide insight into domestic economic activity. Traders are also anticipating U.S. inflation data, due on Wednesday, which could reinforce the Fed’s position on rate policy and potentially drive further gains for USD/CAD.