Forecasts for USD to CAD
Recent forecasts for the USD to CAD exchange rate indicate a firm outlook for the US dollar, particularly in light of recent disappointing economic data from the US, including a miss on ADP employment figures and a slowdown in the ISM services PMI. However, despite these setbacks, the USD stands at a significant high near 1.4175, approximately 2.5% above its three-month average, suggesting strong demand for the currency. Market analysts have been keen to highlight how President Trump’s election win continues to bolster expectations for higher inflation and sustained elevated interest rates, which in turn supports the dollar against the Canadian dollar.
On the other hand, the Canadian dollar faces headwinds primarily due to softening oil prices, which currently stand at 2.4% below their three-month average of 73.9 and have demonstrated considerable volatility, trading within a 14.8% range. As Canada's economy is significantly tied to oil exports, fluctuations in oil prices are likely to have a pronounced effect on the loonie. Analysts suggest that if oil continues to decline, CAD may remain under pressure. Furthermore, Trump's rhetoric on trade and tariffs, particularly against Canada and other key markets, introduces an additional layer of uncertainty that could deter investment and dampen demand for Canadian goods, compounding the challenges faced by the CAD in the current economic climate.
