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HomeFinance NewsCanadian Dollar Continues to Fall as Investors Favor US Dollar

Canadian Dollar Continues to Fall as Investors Favor US Dollar

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The Canadian Dollar (CAD) is trading lower on Monday as a surge in the US ISM Services Purchasing Managers Index (PMI) has prompted investors to shift towards the US Dollar (USD). The increase in PMI figures has exceeded expectations, leading to a broad market movement into USD. Additionally, mixed comments from US Federal Reserve (Fed) policymakers have weighed on market sentiment and risk appetite, further impacting the CAD’s performance.

Looking ahead, the absence of meaningful domestic releases on Monday and the anticipation of Bank of Canada (BoC) Governor Tiff Macklem’s speech on Tuesday leave the CAD vulnerable to continued pressure. With the absence of significant economic indicators in Canada, the Canadian Dollar’s performance remains heavily dependent on external factors, particularly those from the US.

The surge in the USD/CAD pair has led the CAD to test lower levels against major currencies. On Monday, the CAD experienced broad selling pressure, losing ground against most major currencies. The USD/CAD is currently testing above the 1.3500 handle, reaching eight-week highs and encountering technical resistance at around 1.3540. This surge in the pair has positioned the CAD as the second-weakest performer, underscoring the impact of recent market movements on its valuation.

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