USD/CAD Pair Hits Highest Level Since May 2020

The USD/CAD pair saw a significant surge during Wednesday's trading session, reaching its highest level in several years, specifically since May 2020. This increase can be attributed to several key factors, with the most prominent being the strong wave of buying in the US dollar following the US presidential elections. Investor optimism surrounding the policy outlook under the new US administration has contributed to a rise in demand for the US dollar.

Conversely, the Canadian dollar faced downward pressure due to the drop in crude oil prices. As Canada is one of the major oil exporters, a decline in oil prices directly affects the country’s economy and the value of its currency. The negative impact on oil revenues has led to a weakened outlook for the Canadian dollar.

Moreover, the slowdown in economic growth in China, one of Canada’s most significant trading partners, has further contributed to the economic challenges faced by Canada. This combination of factors has fueled the rise of the USD/CAD pair.

In terms of trading performance, the USD/CAD pair rose by 0.34%, reaching a level of 1.3999, maintaining its position near the highest levels since May 2020. This rise reflects the growing demand for the US dollar, fueled by concerns surrounding the Canadian dollar's vulnerability due to the volatility in the global oil market and the broader economic uncertainty.