USDCAD appears to hold onto the gains made as the US dollar (USD) rises as traders expect the Fed to adopt a less dovish position. This is because Donald Trump is expected to follow through on his campaign pledges to implement significant tariffs, such as a 10% purchase gain and decreased corporate taxes.
US Consumer Helped US Dollar Bulls
Trump's fiscal strategy may increase investment, expenditure, and employment demand, raising inflationary pressures. This might lead the Federal Reserve to tighten monetary policy. Fed Chair Jerome Powell, on the other hand, mentioned on Thursday that he does not think Trump's possible return to the White House will impact the Fed's immediate policy choices.
The preliminary University of Michigan Consumer Sentiment Index increased from 70.5 in October to 73.0 in November, surpassing the market's forecast of 71.0. As a result of this positive data, the greenback has generally strengthened.
Given that Canada is the biggest oil exporter to the US, the decline in the value of the commodity-linked Canadian dollar (CAD), which may be due to reduced crude oil prices, could also help the USDCAD pair rise.
