The US Dollar (USD) inched lower against the Canadian Dollar (CAD) on Tuesday, soon after stats concerning industrial production were released by the Federal Reserve, United States. Since the pair’s price is continuously dropping down over the past three days, it is likely to plunge down even more. With a reported figure of -1.8 % concerning the industrial production growth rate, it was 10 pips higher than the economist’s expectation i-e -1.18%. However, it remained lower than the figure reported for the previous month.
On the other hand, the economic bureau of the US shows positive market conditions. It is to be noted that the Bureau of Economic Analysis and the U.S. Census Bureau release all the figures after taking into account the demand for exchange of US goods and the demand for domestic needs.
Being a sensitive indicator, the trade balance plays a significant role in shaping up the US economy. Reading higher than the previous one shows a bullish market for the US Dollar (USD) whereas a lower reading indicates inflation and alarms devaluation of the same.
Since the US Dollar succeeded in rising up over the last week, it is anticipated that it will continue its journey following the bullish trend. The consensus of the market leaders also seems on a positive edge with a predicted value of 0.2%.
Trading the pair around current levels may not be a better idea to start with. However, traders looking for a long term position may try their luck.