USD/CAD à 1,4420 : Dollar US en hausse historique face au dollar canadien

USD/CAD rises above 1.4400 on US Dollar strength

The USD/CAD pair has climbed to levels above 1.4400 and is currently trading near 1.4420 in Thursday’s European session. The US Dollar (USD) is displaying strength against its European and North American counterparts, driven by expectations of a moderate rate-cut cycle by the Federal Reserve (Fed) throughout the year.

The US Dollar Index (DXY), which measures the value of the Greenback against six major currencies, has reached a more-than-two-year high at 108.60.

Fed expected to implement fewer rate cuts in 2025

Fed officials have signaled a reduced number of interest rate cuts for the year, indicating confidence in the economic outlook of the United States (US). The latest dot plot projections suggest that Federal Fund rates could reach 3.9% by 2025, implying the possibility of multiple rate cuts throughout the year.

Investors are now looking ahead to key US economic indicators related to the labor market, scheduled to be released next week. These indicators will offer insights into the current labor demand situation among US employers.

Focus on US ISM Manufacturing PMI data for December

Prior to the release of the labor market data, market participants will closely monitor the ISM Manufacturing PMI data for December, set to be published on Friday. The PMI report is anticipated to indicate a slight dip in manufacturing activities to 48.3 from the previous reading of 48.4, signaling a contraction at a slightly faster pace.

Meanwhile, the Canadian Dollar (CAD) is still under pressure due to the expected continuation of monetary policy easing by the Bank of Canada (BoC). Concerns over the risk of inflation falling below the central bank’s target of 2% persist.

US Dollar Overview

The US Dollar (USD) serves as the official currency of the United States and is widely circulated in numerous other countries alongside local currencies. It holds the position of the most traded currency globally, accounting for a significant portion of foreign exchange turnover. Monetary policy decisions by the Federal Reserve (Fed) play a crucial role in influencing the value of the USD.

The Fed’s objective is to maintain price stability and support full employment through interest rate adjustments. In response to economic conditions, the Fed may raise or lower interest rates, impacting the value of the USD accordingly. Additional policy measures such as quantitative easing (QE) and quantitative tightening (QT) also influence the strength of the US Dollar in various scenarios.

Source : www.fxstreet.com