USD/CAD Plummets to Two-Month Low as US-Canada Deal Hopes Rise
The USD/CAD pair plummeted to a fresh two-month low on Friday, reaching 1.3888 as the Canadian Dollar outperformed most of its peers.
The CAD gained strength due to hopes of an interim deal between the US and Canada, with a government source stating that talks were progressing well and Washington wanted an agreement before the new tariff deadline on August 19.
Meanwhile, the US Dollar was weakened by receding fears of a Federal Reserve interest rate hike in September. Analysts at Wells Fargo noted that inflation remains elevated but improving, and Fed policymakers are reluctant to raise rates until price pressures are durably contained.
The technical analysis suggests that USD/CAD trades lower, with spot holding under the 100-day simple moving average at 1.3920 and the 50% Fibonacci retracement at 1.3902. Immediate resistance is located at the 50% retracement of the latest move at 1.3902.