Brief USD/CAD Amid a Recovering International Financial system and Dovish Fed

USD/CAD 1Q Forecast: Brief USD/CAD Amid a Recovering International Financial system and Dovish Fed

The US Greenback started 2020 on a tear, having fun with a lift from protected haven demand because the coronavirus pandemic crippled the worldwide economic system and spooked traders. As economies continued to regain their footing, the US Greenback misplaced a lot of its luster because the Federal Reserve seems to be to face agency on its accommodative coverage stance into 2023.

Alternatively, the Canadian Greenback is properly positioned for continued financial restoration. Crude oil costs have largely stabilized and though the Financial institution of Canada has vowed its personal procedures to revive the Canadian economic system, they pale compared to the measures taken by the Federal Reserve. Because of this, the Canadian Greenback might proceed to outperform the US Greenback as 2021 unfolds.

USD/CAD Worth Chart: Weekly Time Body (January 2014 – December 2020)

Chart ready by Peter Hanks, created with IG

The downtrend USD/CAD skilled within the again half of 2020 could also be poised to proceed by 2021. Key help ranges had been taken out within the twilight of final yr which could see the pair check the assorted swing lows from 2017 and 2018. These areas might function help if value continues decrease, with any breakdowns permitting for additional losses nonetheless.