The US dollar has sparked a major rally against a basket of currencies this week. The USD rally was primarily sparked by the Federal Reserve’s decision to cut rates by 25bps, bolstering momentum for the dollar to take charge of. This development has led USD to exude prestige over other currencies, crushing currencies like INR and Canadian dollars in the process.
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Canadian Dollar Goes For A Toss
The US dollar has emerged stronger on all fronts as it recently sparked a rally, defeating its global peers in the process. Per the Kobeissi Letter, the US dollar has managed to beat the Canadian dollar for the first time since March 2020, ushering in a wave of change in the recent currency dynamics.
For the first time since March 2020, one USD is now worth $1.44 Canadian dollars, as currency dynamics continue to evolve with new elements setting in.
“For the first time since March 2020, $1.00 US Dollar is now worth $1.44. The USD is nearing its strongest level against the Canadian Dollar since the 1990s. Canada just got even cheaper for Americans.”
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What Factors Prompted The American Currency Rally?
The USD has lately been running on a high ground, with the DXY index sitting at 108. The recent decision of the Federal Reserve to cut rates has contributed to a stellar greenback surge.
In addition to this, factors such as a dollar-friendly regime taking over the US are also adding strength to the American currency. The current president, elect Trump, had earlier vowed to protect the US dollar from de-dollarization drives, which had helped the USD surge in a new price rally.
“The idea that the BRICS countries are trying to move away from the dollar while we stand by and watch is OVER. We require a commitment from these countries that they will neither create a new BRICS currency nor back any other currency to replace the mighty U.S. dollar, or they will face 100% tariffs and should expect to say goodbye to selling into the wonderful U.S. economy. They can go find another “sucker!” There is no chance that the BRICS will replace the USD in international trade, and any country that tries should wave goodbye to America.”
The United States is also bracing for the PCE data to be revealed soon, which can again be a game changer for the current US currency dynamics.
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