CAD expected to Strengthen Against USD
After a difficult month the USD is strengthening against the CAD and at one point on Tuesday was trading at 1.0934 up from 1.0857 on Thursday last week.
However, there may be good news ahead for the CAD. Canada is a potential provider of oil and gas to Europe and there has been considerable development of infrastructure to make this a possibility. If the tensions between Russia and Ukraine continue then there might be a demand for this oil and gas in the near future which would certainly strengthen the CAD.
Canada has been developing close trade relations with the EU and energy is a key component of this. Furthermore, as a member of NATO Canada is aligned with Europe militarily and has shown an interest in participating in any intervention that may take place in Ukraine.
Considering all of this, many are forecasting a strengthening of the Canadian dollar over the coming weeks. Furthermore, the CAD was recently strengthened by official data showed that Canada’s economy grew much faster than expected during the second quarter.
In the meantime the USD is continuing to strengthen due to weakness in the Euro and gains in Asian equities markets.