The Canadian dollar has been moving in a sideways trading pattern against the U.S. dollar. Investors are waiting for more clarity on potential U.S. trade tariffs and additional Bank of Canada (BoC) policy measures.
On Monday, the loonie remained unchanged at 1.4220 per U.S. dollar, or 70.32 U.S. cents. It traded within a narrow range of 1.4183 to 1.4244. The currency has rebounded from a 22-year low of 1.4793 on February 3, yet it has struggled to gain further ground since mid-month.
Several factors are contributing to the sideways trading pattern of the Canadian dollar:
Since Canada is a major oil exporter, fluctuations in crude prices often impact the Canadian dollar. On Monday, oil prices rose 0.4%, settling at $70.70 per barrel. Investors are closely monitoring geopolitical developments, including peace talks related to the Ukraine war.
Additionally, Canadian bond yields declined slightly. The 10-year bond yield dropped 1.2 basis points to 3.096%, reflecting cautious investor sentiment.
The future direction of the Canadian dollar depends on several factors. Clarity on U.S. trade policies, upcoming BoC policy decisions, and movements in global oil prices will play crucial roles. If trade tensions ease and interest rates remain stable, the loonie may regain upward momentum. Otherwise, continued economic uncertainty could keep the currency trading within a sideways pattern.
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The Canadian dollar continues its sideways trading pattern as investors await updates on U.S. trade tariffs and BoC policy.
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