Cohn Resignation to affect USDCAD Pair?
Will Gary Cohn’s resignation impact the USDCAD rate?
Recent news that has caused shockwaves in financial circles is the sudden resignation of US National Economic Council director Gary Cohn. This has led many to fear that the trade tariffs President Donald Trump has been planning are back on the cards. Cohn had been an opponent of such plans, so his departure could be a sign of things to come.
Canada Hit Hard
One country that has a lot to lose if trade tariffs are introduced in the US is Canada. Any tariffs placed on steel and aluminium, in particular, will hit Canada hard, as will the ongoing NAFTA negotiations. All this means that it may be interesting times ahead for the USDCAD forex currency pair.
Where might USDCAD head next?
As with any big news, the resignation of Gary Cohn may see a reaction in the USDCAD pair. It has been on a strong bull run with recent prices trading at highs last seen in the previous summer. Market analysts expect this strength to remain for a short period but, after that, predicting what may happen is a little more tricky.
Once the pair has pushed a little higher, it might see a price correction as the next move. As with all forex markets, potential bulls in this currency pair need to carefully consider when to enter the market. With the pair being at risk of a potential sell-off looking further ahead, it may instead be wise to wait for this to occur before jumping in. Blindly following the bull run that has been happening up to now may well see a nasty surprise waiting for investors.
Canadian central bank may also play its part
Of course, it is not just the US government that will play a part in what happens next with the USDCAD pair. The Canadian Central Bank is likely to leave their interest rate untouched, especially taking into account the rather sorry jobs data reported for the country recently.
It will certainly be interesting to keep an eye on this currency pair for the near future and see just what direction it heads in after the market digests Cohn’s decision to leave.