Forecasts for USD to CAD
The USD to CAD exchange rate has recently displayed a mix of stability and influence from various economic factors. Currently, the USD/CAD is trading at 1.4310, just below its three-month average, having remained within a stable range of 1.4172 to 1.4703. Analysts note that while the US dollar has softened due to a decline in safe-haven demand, this depreciation has been partially offset by a rise in US durable goods orders, indicating a potential resilience in the US economy.
However, upcoming economic data releases, such as the finalized GDP figures for the last quarter of 2024, are poised to impact the USD further. If these figures confirm a slowdown in US economic growth to its lowest levels since early 2024, this could exacerbate the USD's downward pressure. Moreover, expectations surrounding US fiscal policy, particularly in connection with President Trump’s trade strategies and tariffs, are generating uncertainty. The impending tariff announcements slated for April 2 could disrupt investor sentiment and further contribute to volatility in the USD.
On the other side, the CAD has been bolstered by rising oil prices, with current oil trading at around $74.03 per barrel, close to 14-day highs but slightly below its three-month average of $74.98. The Canadian dollar, being closely tied to commodity prices, particularly oil, often benefits from increases in oil value as Canada is among the world’s leading oil exporters. When oil prices rise, the economic outlook for Canada improves, which in turn supports the CAD.
Looking ahead, market commentators suggest that the future trajectory of the USD/CAD exchange rate will depend on ongoing developments in both oil prices and economic data. With rising oil showing potential for further strengthening of the CAD, any sustained increase could entice investor confidence, particularly if the US dollar continues to face headwinds from both domestic economic challenges and international trade tensions. As the situation unfolds, traders should closely monitor both the US Federal Reserve’s policies and movements in global oil markets to gauge potential impacts on the USD/CAD exchange rate.
