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Investing.com - UBS released its latest outlook for the USD/CAD currency pair on Thursday, projecting a downward trend toward the 1.34-1.35 range in the second half of 2025, levels last seen in September 2024.
The Swiss banking giant identified 1.40 as a strong resistance level, noting it would be "eager to increase downside exposure" at that threshold. On the support side, UBS pointed to 1.36, which analysts believe "will be sustainably broken in the coming months."
UBS highlighted several risk factors that could derail its bearish USD/CAD outlook, with potential tariff escalation representing a significant downside risk for the Canadian dollar. The bank also cautioned that a global risk-off shift or an oil price slump could negatively impact the loonie.
The forecast comes as currency markets continue to monitor central bank policies in both the United States and Canada, with interest rate differentials playing a crucial role in the pair’s movement throughout 2025.
The USD/CAD exchange rate serves as a key indicator for trade relations between the two neighboring countries, with its movements affecting various sectors including manufacturing, energy, and agriculture across the North American economic landscape.
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