US Dollar Weakens While Canadian Dollar Improves
Today, USD/CAD fell below 1.2450. This is the lowest it’s been since the middle of March, and it continues a trend that shows the US dollar declining while the Canadian dollar strengthens.
The steady course the Canadian dollar is enjoying continues due to last week’s announcement from the Bank of Canada that interest rates will remain unchanged. But the Bank of Canada also announced that Canadian government bonds’ weekly net purchases will be adjusted to meet a target of $3 billion.
Investors are being advised to trade carefully because a small correction is expected within the next few days to create a new low for the USD/CAD currency pair. The US dollar has continued to weaken abroad falling 0.52% down to 90.8621 on Friday and is still sitting below the 91 mark before the opening of the New York session today.
Comparatively, the British pound saw improvement going up from 1.3836 to 1.3875. The euro likewise did well, seeing an increase of 1.2007 up to 1.2091. The Australian dollar saw an increase as well, moving up from 0.7706 to 0.7756 U.S. dollar.
A number of factors are continuing to keep the US dollar from improving and seeing the kind of gains that other currencies are making, most notably the slower than expected economic recovery. Late trading through the end of session Friday showed the US dollar suffering across a broad spectrum of currencies and continuing this downward trend. It is difficult to calculate where it will end up at this point, as the economy continues to prove unpredictable and not as resilient as was hoped from economic analysis earlier in the year.
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