- The US dollar has fallen a bit against the Canadian dollar during the trading session on Monday.
- So, at this point in time, I think we've got a situation where the market is definitely paying close attention to the bond market.
- It's worth noting that we got a little bit stretched
So, with that, we fell on Monday, not a huge surprise, but it looks like there are buyers underneath the 1.44 level. I would expect the same at the 1.43 level as well. So, what I'm doing is basically waiting for an opportunity to buy on the dip when it comes to this market, as the US dollar should continue to do quite well against the Canadian dollar, all things being equal. After all, tariffs are coming for Canada unless they do something in the next 24 hours, or if Trump pushes it back yet again, we'll see. But at this point in time, the Canadians have a lot of problems well beyond Donald Trump. And I do think that eventually that overwhelms their economy and or currency. However, anything's possible. So, we have to have a point where we bail out of the idea of going higher. And that would be somewhere around 1.4150.
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Above 1.45
If the market were to take off and break above the 1.45 level, it could very well go looking all the way back to the 1.48 level. I do think it is probably only a matter of time before that happens. Now having said that it is worth noting that yields in America are dropping pretty quickly. And now we're starting to see the idea of a Federal Reserve interest rate cut being priced in if that's going to actually happen, it'll be interesting because I think what's going to come of that is a real whipsaw. A lot of the leading indicators that I see do suggest that there is going to be inflation later this year, and then maybe this summertime or so. And therefore, we might have a little period here of somewhat US dollar weakness, but I think the Canadian dollar has a special place in the forex world right now and that's going to continue to be the case. I am a buyer of dips at least until we break down below the 1.4150 level.
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