Brief USD/CAD Amid a Recovering World Economic system and Dovish Fed

USD/CAD 1Q Forecast: Brief USD/CAD Amid a Recovering World Economic 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 financial system and spooked buyers. As economies continued to regain their footing, the US Greenback misplaced a lot of its luster because the Federal Reserve seems to face agency on its accommodative coverage stance into 2023.

Then again, the Canadian Greenback is effectively 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 financial 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 Value 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 way of 2021. Key assist ranges had been taken out within the twilight of final 12 months which could see the pair take a look at the varied swing lows from 2017 and 2018. These areas might function assist if value continues decrease, with any breakdowns permitting for additional losses nonetheless.