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28/04/25
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USD/CAD Soars on Trade Optimism Despite Oil Pressures
The USD/CAD currency pair is experiencing upward momentum, trading around 1.3880 during the Asian session on Monday. This performance marks the second consecutive day of gains as the US Dollar finds support from a perceived easing of trade tensions between the United States and China. Recent developments, including China’s decision to exempt certain US imports from hefty tariffs, have led to heightened optimism regarding potential improvements in trade relations.
Positive sentiment was bolstered by reports indicating that China has removed specific US goods from its 125% tariff list, igniting hopes that a resolution to the protracted trade conflict between the two economic superpowers might be on the horizon. However, a spokesperson from the Chinese embassy dismissed these speculations, asserting that there are no ongoing negotiations with the US regarding tariffs and urging the country to refrain from further confusion.
The US Dollar Index, which measures the currency against a selection of six major counterparts, also reflects a bullish trend, remaining steady at approximately 99.70. As the Federal Reserve approaches its blackout period prior to the upcoming Federal Open Market Committee meeting, market participants continue to monitor economic indicators and signals that could influence monetary policy.
Meanwhile, the Canadian Dollar is grappling with pressures related to the commodity market, particularly as crude oil prices continue to decline. Factors contributing to this downturn include advancements in US-Iran nuclear negotiations, which raise the likelihood of Iranian crude oil returning to global markets. Additionally, there are growing expectations that OPEC+ may opt to increase production levels for a second consecutive month, further exerting downward pressure on oil prices, which in turn impacts the value of the CAD.
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