The US dollar to Canadian dollar exchange rate has recently climbed above 1.3800, a level not seen since April 2018. This surge in the exchange rate is due to a combination of factors, including the Bank of Canada’s steady policy and markets betting on a hawkish US Federal Reserve.
The Bank of Canada’s steady policy has been a major factor in the US dollar to Canadian dollar exchange rate climbing above 1.3800. The Bank of Canada has kept its benchmark interest rate at 1.75% since October 2018, and has signaled that it will continue to maintain this rate for the foreseeable future. This steady policy has helped to strengthen the Canadian dollar, as investors are attracted to the stability of the Canadian economy.
In addition, markets are betting on a hawkish US Federal Reserve. The US Federal Reserve has been gradually raising interest rates since December 2015, and is expected to continue this trend in 2019. This hawkish stance has caused investors to flock to the US dollar, as higher interest rates make it more attractive for investors to hold US dollars.
The combination of the Bank of Canada’s steady policy and markets betting on a hawkish US Federal Reserve has helped to push the US dollar to Canadian dollar exchange rate above 1.3800. This surge in the exchange rate could have a positive effect on the Canadian economy, as it could lead to increased foreign investment and a stronger Canadian dollar. However, it could also lead to higher prices for imports, as goods purchased from the US will become more expensive when converted into Canadian dollars.
Overall, the US dollar to Canadian dollar exchange rate climbing above 1.3800 is a positive sign for the Canadian economy. The Bank of Canada’s steady policy and markets betting on a hawkish US Federal Reserve have helped to strengthen the Canadian dollar, which could lead to increased foreign investment and a stronger economy. However, it is important to keep an eye on the exchange rate, as any sudden changes could have an adverse effect on the Canadian economy.
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