The Canadian Dollar is stable, with USD/CAD holding around the upper 1.35 range. Ongoing trade talks between the US and Canada have raised hopes for an agreement this month. Currently, the CAD faces challenges from weaker market sentiment, leading to a slight increase in the expected USD/CAD rate to 1.3560. The final June S&P Global Services and Composite PMIs for Canada will be released soon.

Broader Downtrend

The overall downtrend in the USD is still in place, limiting its potential to rise above the low or mid-1.36 range in the near future. Support for USD/CAD is seen around the 1.3540 to 1.3550 area. Keep in mind that any forward-looking statements come with risks and uncertainties. It’s crucial to do thorough research before making any investment decisions, as there is a possibility of significant financial losses. This summary is not investment advice. Individuals are solely responsible for their financial decisions. The views expressed here do not represent official policy, and the information may not always be accurate or timely.

Canadian Dollar and Trade Negotiations

With USD/CAD near the upper 1.35 zone, we are in a holding pattern that may not last long. Ongoing trade negotiations between the US and Canada increase the chances of a formal agreement soon. If a deal is reached this month, we could see some movement in the CAD, depending on specific policy details rather than general news. Right now, the Canadian Dollar is soft due to low global risk appetite. This is important because currencies linked to commodities and economic growth, like the CAD, often struggle when market sentiment declines. This sentiment has pushed the expected USD/CAD rate slightly higher to around 1.3560, reflecting current market conditions. The release of Canada’s final June S&P Global Services and Composite PMIs could add another layer of complexity. If these numbers disappoint, we might see more pressure on the CAD. Traders should keep an eye on these reports for possible triggers, especially if surveys indicate weakness in consumer services or a decline in business investment sentiment. Meanwhile, the broader downward trend of the USD serves as a counterbalance. This trend is driven by market positioning and medium-term interest rate expectations, which helps prevent a sustained increase in USD/CAD. Recent price movements show that the currency pair is struggling to rise convincingly above the low to mid-1.36 range. Nonetheless, the 1.3540 to 1.3550 range has provided some price support. This support could hold unless there’s strong US data or a significant worsening of Canadian metrics. With this in mind, traders should be patient and maintain a short-term focus in their strategies. From our viewpoint, the interplay of macroeconomic data from both countries is crucial. It may be beneficial to favor straightforward setups with limited exposure to big swings, especially around data releases or policy announcements. Traders should consider how shifts in sentiment, commodity prices, and monetary or fiscal policy hints in North America could lead to more pronounced intraday activity, even if overall trends remain steady. As always, careful planning for different scenarios is important at this time. Create your live VT Markets account and start trading now.

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