- The Greenback steps up against the CAD on Fed rate hikes and continuing NAFTA coverage.
- A lack of workable trade agreements between the US and Canada could see a riled-up presidential administration take wild swings on the economic stage.
The USD/CAD spiked into two-weeks highs following the US Fed’s rate hike on Wednesday, taking a run at the 1.3050 level heading into Thursday’s overnight session.
The US Federal Reserve pushed the US interest rate to 2.25% on Wednesday, and the US Dollar stepped up further against the Loonie, continuing the USD/CAD’s bullish recovery from last week’s bottom of 1.2884.
NAFTA renegotiations continue to spiral out, with the US and Canada increasingly entrenched in immovable positions on trade talks, leaving the Dollar-Loonie pairing to spiral out as headlines send CAD traders’ sentiment back and forth on the issues.
US President Donald Trump is again threatening to impose tariffs on Canadian-manufactured automobiles as the US’ president, who campaigned on a platform of skillful negotiation and impressive deal-making, complains that he is unable to gain any ground with Canadian negotiators, threatening to derail the entire process with stiff economic sanctions and threatening to outright abandon NAFTA in favour of bilateral deals.
USD/CAD levels to watch
The US Dollar is recovering back into September’s opening prices as the USD/CAD continues to cycle around the 1.31 major technical level for a second month straight, with Daily candles marking out a rough sideways channel from 1.2850 to 1.3200, with support coming from the 200-day SMA currently sitting at 1.2870.
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