In the view of economists at Mizuho Bank, the markets are now focusing on the possibility of a recession, so investors will need to monitor global economic trends going forward. They expect the USD/CAD pair to trade in a range from 1.27-1.32 in August.

Drop to 1.26/27 to be short-lived

“If recessionary concerns grow from here on, crude oil prices will probably fall and there is unlikely to be a strong appetite for Canadian-dollar buying.”

“With the greenback being sold after the July FOMC meeting, the USD/CAD pair might drop to 1.26-1.27 for a time. This trend will be short-lived, though, with the pair set to trade in a range from 1.27-1.32 in August.”