The future of the USD/CAD pair: long-term forecast
The US dollar was the ultimate king of the currency party in 2022 but everything passes sooner or later. In spring 2023, there are few traces of the former USD confidence. Many analysts believe that the USD will weaken to the basket of major currencies, including CAD. Let’s try to find out how much the Canadian dollar might increase to the US dollar and why it may happen.
After that, we allocate the USD/CAD pair. The chart below reminds us that the difference between the US and the Canadian dollars for the same period reached about 8%. This number is smaller than in the previous picture but still impressive. If you want to predict such market movements, you can use different trading tools. One of them is the economic calendar thanks to which it’s possible to find all the major economic events in one single place.
Federal Reserve Chairman Jerome Powell claimed that the regulator isn’t going to decrease the rate and that the decision about the pause in increases will be made at the June session. But most analysts are sure – it was the very last hike. And if the cycle is close to the end, then there are more and more alternative assets to the USD. Among the options, experts name reaching-its-high Gold, other currencies, and even stocks of tech companies.
All the abovementioned things are connected with the USD, not with the CAD. But it’s logical that if the US dollar is under pressure then the Canadian dollar will probably show growth, even without obvious drivers. Moreover, the CAD has something to boast about. Firstly, the Canadian economy seems to burgeon, unlike the US economy. Secondly, analysts consider the CAD to be underestimated at the moment.
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