USD/CAD Forecast 03/02: US Dollar Continues To Rise Against

2026-02-03 02:12:41

(MENAFN- Daily Forex) The US dollar has rallied against the Canadian dollar again during the day on Monday as the widely reported death of the US dollar seems to be premature/CAD

The US dollar has rallied against the Canadian dollar again during the day on Monday as we see the 1.3550 level offering support. Of course, the manufacturing PMI numbers came out hotter than anticipated in the United States, suggesting that the Federal Reserve will have to be a little bit more hesitant to get aggressively dovish, which the market of course wants.

Now we have a situation where we have to compare whether or not the Federal Reserve is going to cut rates the way everybody had anticipated, especially now that the Federal Reserve Chairman nominee Kevin Warsh is well known. He is typically thought of as being a little bit more hawkish, or at the very least a little bit more fiscally responsible. That could shore up the balance sheet or at least keep it from expanding crazily in the United States central bank Rate Differentials and Market Outlook

With that being said, we have to compare it against Canada. Canada is basically sitting still; we will just have to see how that plays out. But I would also point out the idea that we have bounced from the bottom of what I think is a large range. At this point in time, I also recognize that we could go as high as 1.41 and not change anything.

EURUSD Chart by TradingView

This is a pair that is typically rather choppy, and that is something that you need to keep in the back of your mind. The interest rate differential continues to favor the United States dollar, and you do get paid to get long of this market and hold the position. Another reason I like it. Ultimately, I think we probably have to find balance maybe somewhere closer to the 1.38 level in the short term, but the 1.40 level above.

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