Tag: USDCAD

  • The BoC keeps its policy rate unchanged

    The BoC keeps its policy rate unchanged


    On Wednesday, the Bank of Canada (BoC) held its policy rate steady at 2.75%, aligning with the expectations of market analysts.

    BoC policy statement key highlights

    Uncertainty over US tariffs remains high; we will seek more information on US trade policy and its impacts.

    The BoC also cites unexpected firmness in recent inflation data and the fact the Canadian economy is softer, but not sharply weaker.

    We will support economic growth while ensuring inflation remains well-controlled.

    The Governing Council is proceeding carefully with particular attention to the risks and uncertainties facing the Canadian economy.

    We are focused on ensuring Canadians continue to have confidence in price stability.

    Says watching the extent to which US tariffs cut demand for exports, how quickly cost increases are passed on to consumer prices, and how inflation expectations evolve.

    The Canadian economy is expected to be considerably weaker in Q2 than in Q1, with strength in exports and inventories reversing.

    April’s annual inflation rate excluding taxes was 2.3%, slightly stronger than expected.

    The bank says it will continue to assess timing and strength of downward and upward pressures on inflation.

    Market reaction

    The Canadian Dollar (CAD) maintains its constructive stance on Wednesday, motivating USD/CAD to trade with modest losses around the 1.3700 neighbourhood following the BoC’s decision to leave rates unchanged.

    Canadian Dollar PRICE Today

    The table below shows the percentage change of Canadian Dollar (CAD) against listed major currencies today. Canadian Dollar was the strongest against the US Dollar.

    USD EUR GBP JPY CAD AUD NZD CHF
    USD -0.30% -0.18% -0.19% -0.15% -0.49% -0.40% -0.27%
    EUR 0.30% 0.08% 0.08% 0.12% -0.20% -0.12% -0.00%
    GBP 0.18% -0.08% -0.04% 0.04% -0.28% -0.20% -0.10%
    JPY 0.19% -0.08% 0.04% 0.05% -0.35% -0.15% -0.08%
    CAD 0.15% -0.12% -0.04% -0.05% -0.33% -0.25% -0.13%
    AUD 0.49% 0.20% 0.28% 0.35% 0.33% 0.08% 0.20%
    NZD 0.40% 0.12% 0.20% 0.15% 0.25% -0.08% 0.10%
    CHF 0.27% 0.00% 0.10% 0.08% 0.13% -0.20% -0.10%

    The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Canadian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent CAD (base)/USD (quote).

    This section below was published as a preview of the Bank of Canada’s (BoC) monetary policy announcements at 09:00 GMT.

    • The Bank of Canada (BoC) is seen keeping rates unchanged.
    • The Canadian Dollar navigates the area of yearly highs vs. the US Dollar.
    • Headline CPI in Canada drifted below the central bank’s target.
    • Trade policies should prevail at Governor Macklem’s press conference.

    Market analysts generally predict that the Bank of Canada (BoC) will keep its interest rate at 2.75% on Wednesday, adding to the pauses recorded at the March and April monetary policy meetings.

    In the meantime, the Canadian Dollar (CAD) has been steadily appreciating since it fell to yearly lows in the 1.4400 zone against the US Dollar (USD). The Loonie is currently navigating the area of YTD highs in the proximity of the 1.3700 region.

    Meanwhile, the focus has been on US President Donald Trump’s trade policies, particularly those pertaining to tariffs, since he took office again in January. It is anticipated that this particular topic will take centre stage during the BoC event, influencing both Governor Tiff Macklem’s remarks and media enquiries.

    As growing global uncertainties, mostly caused by the White House’s inconsistent stance on tariffs, compel a reexamination of trade policy, the Bank of Canada is planning to keep interest rates paused once again for June. Given this uncertainty, it is probable that the BoC’s announcement and Governor Macklem’s subsequent news conference this week will be cautious in tone.

    Following the bank’s decision to keep rates unchanged on April 16, Governor Tiff Macklem underlined again the bank’s symmetric approach to its inflation objective, expressing worry when inflation veers either over or below the 2% level. He stressed that the phrase “decisively”, used in earlier exchanges, shouldn’t be taken as a policy cue.

    Regarding the general state of the economy, Macklem underlined the need for adaptation in view of continuous uncertainty, especially with regard to taxes. Once trade circumstances stabilise, the Bank may go back to a more defined base case projection.

    Carolyn Rogers, senior deputy governor, dismissed recent market swings, saying it is too early to draw fundamental conclusions. She underlined that institutions are properly funded with some ability to withstand volatility and that Canadian financial markets remain orderly.

    Regarding monetary policy, Macklem said that the Governing Council debated between maintaining rates constant or cutting 25 basis points. Rogers also mentioned several Council members who were really hopeful and not anticipating further inflationary pressure.

    Previewing the BoC’s interest rate decision, analysts Taylor Schleich and Ethan Currie at the National Bank of Canada noted, “We expect the Bank of Canada to leave its policy rate unchanged at 2.75%… The labour market—which carries a lot of weight—is consistent with further rate relief, but the inflation picture right now isn’t giving the green light. There are also still key unknowns on trade impacts, inflation expectations and fiscal policy which further obscure the picture.”

    When will the BoC release its monetary policy decision, and how could it affect USD/CAD?

    The Bank of Canada will announce its policy decision on Wednesday at 13:45 GMT, with Governor Tiff Macklem holding a press conference at 14:30 GMT thereafter.

    Market observers do not expect significant surprises; however, they anticipate that the central bank will maintain its emphasis on the effects of US tariffs on the Canadian economy. This perspective may also have repercussions for CAD fluctuations.

    Senior Analyst Pablo Piovano from FXStreet highlighted that “USD/CAD has recently broken below its key 200-day Simple Moving Average (SMA) at 1.4020, subsequently opening the taps for extra weakness in the next few weeks.”

    “USD/CAD has hit a fresh 2025 bottom at 1.3673 on June 2, exclusively following dynamics around the US Dollar. Once this level is cleared, extra losses could extend to the September 2024 low at 1.3418 reached on September 25,” Piovano added.

    Piovano notes that “on the upside, the pair should encounter initial resistance at its May top of 1.4015 recorded on May 12 and May 13. This region of monthly peaks appears reinforced by the vicinity of the key 200-day SMA. If the pair manages to surpass the latter, it could embark on a potential visit to the next upside targets at the April high at 1.4414 set on April 1, ahead of the March top at 1.4542 recorded on March 4, and ultimately the 2025 peak at 1.4792 reached on February 3.”

    “Currently, the Relative Strength Index (RSI) has dropped below the 40 level, suggesting further weakness remains in the pipeline. In addition, the ongoing bearish trend looks solid, as indicated by the Average Directional Index (ADX) around the 27 zone,” Piovano concludes.

    Canadian Dollar FAQs

    The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar.

    The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive.

    The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD.

    While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar.

    Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.



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  • USD/CAD extends gains above 1.3800 with all eyes on the FOMC Minutes

    USD/CAD extends gains above 1.3800 with all eyes on the FOMC Minutes


    • The US Dollar remains firm, drawing support from the positive US Consumer Confidence data and easing trade war fears.
    • The CAD remains on the defensive amid lower Oil prices and hopes of further BoC cuts.
    • Later today, the tone of the FOMC minutes is likely to confirm the US Dollar’s near-term direction.

    The US Dollar is showing a moderate advance on Wednesday, extending gains after Tuesday’s rebound. Upbeat US Consumer Confidence data and easing fears about trade wars are supporting the Greenback, with the release of the Fed minutes on focus.

    The Conference Board’s Consumer Confidence reading beat expectations on Wednesday with a 12.3 point rebound to a 98.0 reading, after having deteriorated steadily during the last five months, on the back of tariff uncertainty.

    Upbeat US data sends debt fears to the background

    The same survey revealed improving expectations on income, business conditions, and employment, while the percentage of consumers fearing an economic recession in the next 12 months declined, compared to the previous month.

    These figures offset a significant decline in US Durable Goods orders, which fell by 6.3% in April, on the back of lower demand for aircraft. Likewise, the risk-on sentiment pushed government debt fears to the back seat, at least for now.

    The Canadian Dollar, on the other hand, remains on the defensive, with Oil prices ticking lower, weighed by expectations that OPEC+ countries will increase supply from July. Furthermore, last week’s data strengthened the case for further BoC easing in June, adding selling pressure on the Loonie. 

    Today, the focus is on the minutes of the latest Fed meeting, which are expected to shed some more light on the bank’s upcoming monetary policy decisions. The tone of the minutes is likely to determine the US Dollar’s reaction until Friday’s PCE inflation release.

    Fed FAQs

    Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates.
    When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money.
    When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.

    The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions.
    The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.

    In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system.
    It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.

    Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.



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  • USD/CAD extends the decline to near 1.3850 amid weaker US Dollar 

    USD/CAD extends the decline to near 1.3850 amid weaker US Dollar 


    • USD/CAD trades in negative territory near 1.3855 in Thursday’s early Asian session. 
    • Worries about a ballooning US deficit weigh on the US Dollar. 
    • The advanced S&P Global Manufacturing and Services PMI reports will be closely watched later on Thursday. 

    The USD/CAD pair extends its downside to around 1.3855 during the early Asian session on Thursday, pressured by a weaker US Dollar (USD). Investors await the advanced S&P Global Manufacturing and Services PMI reports later on Thursday, followed by the Chicago Fed National Activity Index, the usual Initial Jobless Claims and Existing Home Sales. 

    The ‘Sell America’ investment theme continues to undermine the Greenback and drag the pair to the two-week low. The White House put pressure on Republicans on Wednesday, urging lawmakers to quickly approve President Donald Trump’s signature tax bill, adding that a failure to do so would be the “ultimate betrayal.”

    “The disappointing auction results … fit the narrative of weakening demand for U.S. assets and a ‘sell America’ trade amid fiscal concerns,” said Kim Rupert, managing director, global fixed income analysis at Action Economics in San Francisco.

    On the other hand, a decline in Crude Oil prices could undermine the commodity-linked Loonie and create a tailwind for the pair. It’s worth noting that Canada is the largest oil exporter to the US, and lower crude oil prices tend to have a negative impact on the CAD value. 

    Canadian Dollar FAQs

    The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar.

    The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive.

    The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD.

    While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar.

    Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.

    Market players will keep an eye on the release of US PMI reports, which is due later on Thursday. In case of a stronger-than-expected outcome, this could lift the USD against the Canadian Dollar (CAD) in the near term.



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  • Loonie strengthens for third day as core inflation rises, US Dollar stumbles

    Loonie strengthens for third day as core inflation rises, US Dollar stumbles


    • The Canadian Dollar extends gains against the US Dollar on Wednesday, with USD/CAD falling below 1.3900.
    • BoC rate cut expectations fade as underlying inflation remains sticky.
    • The US Dollar remains under pressure,  DXY slips to a fresh weekly low.

    The Canadian Dollar (CAD) strengthens further against the US Dollar (USD) on Wednesday, marking a three-day rally, with USD/CAD slipping below 1.3900 as markets digest stronger-than-expected Canadian inflation figures and a broadly subdued Greenback.

    The market reacted to the data released on Tuesday with renewed uncertainty as Canada’s inflation report showed an unexpected rise in core prices despite a steep drop in the headline figure. The headline Consumer Price Index (CPI) rose to 1.7% YoY in April, down from 2.9% in March.  On a monthly basis, the CPI fell 0.1% in April from 0.3% in March, well below market expectations. In contrast, the Bank of Canada’s (BoC) preferred measure, BoC core CPI, accelerated to 2.5% YoY, from 2.2%, and monthly CPI rose to 0.5% MoM from 0.1% in March.

    The fall in headline inflation was partly driven by weaker energy prices, which fell 12.7% YoY in April as the recent removal of the federal carbon tax intensified the impact of falling oil prices driven by OPEC’s decision to hike output.

    The latest inflation data paints a complex picture for the BoC ahead of its June rate decision. The BoC held its benchmark interest rate steady at 2.75% during its April policy meeting. Some economists now lean toward another pause in cuts.

    While the headline inflation figure eased, the rise in core measures indicates underlying price pressure picked up in April.

    “It is going to make it a much more challenging backdrop for the Bank of Canada to continue cutting rates, at least in the near term,” said Benjamin Reitzes, Managing Director of Canadian Rates and Macro Strategist at BMO Capital Markets.

    On top of that, the impact of US trade tariffs is adding to the uncertainty, potentially keeping inflation higher for longer and making it harder for the central bank to move ahead with its easing plans.

    Meanwhile, the US Dollar Index (DXY), which measures the USD against a basket of six major currencies, briefly slipped below the 100.00 mark to a fresh weekly low, down over 1.2% this week. The Greenback remains under pressure amid a broader weakness in the US economy after Moody’s cut the US sovereign credit rating to Aa1 on May 16 and a cautious economic outlook from the Federal Reserve (Fed).

    Looking ahead, traders will keep a close eye on the US Purchasing Managers Index (PMI) data due on Thursday and Canada’s upcoming Retail Sales data on Friday. At the same time, shifts in US economic policy and ongoing global trade developments will continue to play a key role in shaping the direction of the USD/CAD pair.



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  • Loonie strengthens for third day as core inflation rises, US Dollar stumbles

    USD/CAD remains weak near 1.3950 ahead of Canadian CPI release


    • USD/CAD weakens to around 1.3950 in Tuesday’s early Asian session.
    • Moody’s downgrades the US credit rating to ‘AA1’, weighing on the US Dollar.
    • A dovish turn from the BoC has fueled speculation of a June rate cut. 

    The USD/CAD pair softens to near 1.3950 during the early Asian session on Tuesday. The Greenback edges lower against the Canadian Dollar (CAD) on a surprise downgrade of the US government’s credit rating late on Friday and renewed trade tensions. Traders will keep an eye on the Canadian Consumer Price Index (CPI) inflation data, which is due later on Tuesday.

    Moody’s downgrade of America’s sovereign rating to ‘AA1’ from ‘AAA,’ along with rising expectations that the Federal Reserve (Fed) will soon start cutting rates amid cooling US inflation, have eroded the US Dollar’s (USD) appeal.  The downgrade underscores growing concerns over fiscal deterioration and tariff-induced distortions under US President Donald Trump. 

    Fed officials maintain caution and call for more clarity before committing to policy changes, which caps the upside for the USD. The markets are now pricing in a nearly 91.6% odds of rates holding at 4.25%–4.50% in the June meeting and a 65.1% chance of no change in July, according to the CME FedWatch tool. 

    Meanwhile, a decline in Crude Oil prices could undermine the commodity-linked Loonie. It’s worth noting that Canada is the largest oil exporter to the US, and lower crude oil prices tend to have a negative impact on the CAD value. 

    Nonetheless, dovish expectations for the Bank of Canada (BoC) after lackluster April job gains and a rise in unemployment might weigh on the CAD and create the pair’s downside. Capital Economics analysts said that US tariffs are finally weakening the Canadian economy, increasing the likelihood of BoC rate reductions at an aggressive pace.

    Canadian Dollar FAQs

    The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar.

    The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive.

    The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD.

    While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar.

    Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.



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  • USD/CAD steadies near 1.3800, downside appears due to a weaker US Dollar

    USD/CAD steadies near 1.3800, downside appears due to a weaker US Dollar


    • USD/CAD could face downside pressure as the US Dollar weakens, possibly due to rising trade tensions.
    • President Donald Trump’s proposal to impose a 100% tariff on foreign-made films has heightened fears of renewed protectionist policies.
    • The Canadian Dollar is rebounding in line with other G10 currencies, supported by fading recession concerns.

    USD/CAD is holding steady around the 1.3800 level during Monday’s Asian session, following a decline in the previous trading day. Upside momentum for the pair may be capped as the US Dollar (USD) faces pressure, potentially due to renewed trade tensions. President Donald Trump announced plans to instruct the US Trade Representative and Commerce Department to initiate a 100% tariff on foreign-made films.

    The US Dollar Index (DXY), which tracks the Greenback against six major currencies, is on the back foot for the second straight day, trading near 99.70 at the time of writing. Market participants will turn their focus to the upcoming US ISM Services PMI data for further clues on the economic outlook.

    President Trump confirmed he has no intention of replacing Federal Reserve Chair Jerome Powell before his term expires in May 2026. Despite calling Powell “a total stiff,” Trump reiterated his view that interest rates should eventually be cut.

    On the labor front, the April Nonfarm Payrolls (NFP) report surprised to the upside, with 177,000 jobs added versus expectations of 130,000. This followed a revised increase of 185,000 in March. The unemployment rate held steady at 4.2%, while average hourly earnings grew 3.8% year-over-year, in line with the previous month.

    Meanwhile, the Canadian Dollar (CAD) found support alongside other G10 currencies amid easing recession concerns. Canada’s GDP showed modest growth in March, despite falling commodity prices and fears surrounding a potential trade dispute with the US. The resilience in economic data has helped bolster sentiment toward the CAD.

    Canadian Dollar FAQs

    The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar.

    The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive.

    The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD.

    While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar.

    Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.



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  • USD/CAD extends gains above 1.3800 with all eyes on the FOMC Minutes

    USD/CAD holds gains above 1.3850 on optimism over potential US trade deals


    • USD/CAD edges higher as the US Dollar strengthens due to optimism surrounding potential US trade deals.
    • Washington appears to be making headway in early trade discussions with Asian allies, including South Korea and Japan.
    • The Canadian Dollar remains under pressure as Trump suggested that the 25% tariff on Canadian auto imports could be raised.

    USD/CAD recovers its recent losses from the previous session, trading around 1.3870 during the Asian hours on Friday. The pair gains as the US Dollar (USD) strengthens, supported by optimism surrounding potential US trade deals. According to Reuters, Washington appears to be making headway in early trade discussions with Asian allies, including South Korea and Japan.

    However, the Greenback encountered some pressure following Thursday’s release of Initial Jobless Claims data. The US Department of Labor reported that claims rose to 222,000 for the week ending April 19, slightly exceeding expectations and up from the prior week’s revised figure of 216,000. Meanwhile, Continuing Jobless Claims fell by 37,000 to 1.841 million for the week ending April 12.

    Minneapolis Fed President Neel Kashkari expressed concern late Thursday about the potential for future layoffs amid ongoing uncertainty. While he noted that there hasn’t been a noticeable increase in layoffs yet, some businesses are reportedly preparing for that possibility if uncertainty persists. Kashkari added that resolving trade tensions could ease concerns and support a more optimistic outlook.

    Additionally, the USD/CAD pair gained further support as the Canadian Dollar (CAD) came under pressure following comments from US President Donald Trump on Wednesday. Trump suggested that the 25% tariff on Canadian auto imports could be raised, reinforcing his commitment to securing a trade deal with Canada. The goal, he emphasized, is to bolster US auto production and lessen dependence on foreign vehicles, according to Reuters.

    Canadian Dollar PRICE Today

    The table below shows the percentage change of Canadian Dollar (CAD) against listed major currencies today. Canadian Dollar was the weakest against the US Dollar.

    USD EUR GBP JPY CAD AUD NZD CHF
    USD 0.39% 0.28% 0.23% 0.11% 0.23% 0.25% 0.42%
    EUR -0.39% -0.11% -0.15% -0.30% -0.15% -0.13% 0.02%
    GBP -0.28% 0.11% -0.04% -0.17% -0.03% -0.02% 0.11%
    JPY -0.23% 0.15% 0.04% -0.12% -0.02% -0.02% 0.14%
    CAD -0.11% 0.30% 0.17% 0.12% 0.04% 0.14% 0.28%
    AUD -0.23% 0.15% 0.03% 0.02% -0.04% 0.02% 0.15%
    NZD -0.25% 0.13% 0.02% 0.02% -0.14% -0.02% 0.13%
    CHF -0.42% -0.02% -0.11% -0.14% -0.28% -0.15% -0.13%

    The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Canadian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent CAD (base)/USD (quote).



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  • Loonie strengthens for third day as core inflation rises, US Dollar stumbles

    USD/CAD falls toward 1.3850 as Fed’s Beige Book suggests deteriorating economic conditions


    • USD/CAD weakens as the Fed’s April Beige Book underscores the potential negative impact of tariffs on the economic outlook.
    • The US Dollar also loses ground after the flash Composite PMI pointed to a slowdown in overall business activity.
    • President Trump suggested the 25% tariff on Canadian auto imports to the US could be raised.

    USD/CAD edges lower around 1.3870 during Thursday’s Asian session, after climbing roughly 0.50% in the previous day. The pair is under pressure as the US Dollar (USD) weakens following the Federal Reserve’s April Beige Book, which pointed to deteriorating economic conditions.

    The report highlighted growing concerns about tariffs, which have negatively impacted the economic outlook across multiple US regions. Consumer spending appeared uneven, and labor market conditions softened, with many districts noting stagnant or slightly declining employment.

    Further pressuring the Greenback were Wednesday’s mixed S&P Global PMI figures. The flash Composite PMI for April fell to 51.2 from 53.5, signaling a slowdown in business activity. While the Manufacturing PMI ticked up slightly to 50.7, the Services PMI dropped sharply to 51.4 from 54.4, reflecting weaker demand in the services sector. Chris Williamson of S&P Global noted that growth momentum is waning, with persistent inflation complicating the Fed’s policy outlook.

    However, the USD/CAD pair appreciated on Wednesday as the Canadian Dollar (CAD) remained under pressure. This came after US President Donald Trump suggested that a 25% tariff on Canadian auto imports to the US could be increased. Trump emphasized efforts to strike a deal with Canada, aiming to boost US auto production and reduce reliance on foreign vehicles, according to Reuters.

    Meanwhile, the Canadian Dollar (CAD) also struggles due to the International Monetary Fund’s (IMF) downward revision of Canada’s 2025 GDP growth forecast to 1.4% has renewed concerns about weakening domestic demand, Additionally, the Bank of Canada’s (BoC) decision to keep its benchmark interest rate steady at 2.75% underscores a cautious stance, influenced in part by ongoing uncertainty surrounding potential US tariffs.

    Canadian Dollar FAQs

    The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar.

    The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive.

    The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD.

    While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar.

    Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.



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  • Falls back to near 1.3800

    Falls back to near 1.3800


    • USD/CAD retraces to near 1.3800 as the US Dollar surrenders initial gains.
    • US President Trump has signaled a de-escalation in the tariff war with China.
    • A sharp decline is expected in the USD/CAD pair if it breaks below the upward-sloping trendline around 1.3800.

    The USD/CAD pair retreats from the high of 1.3860 posted earlier in the day to near 1.3800 during European trading hours on Wednesday. The Loonie pair falls back as the US Dollar (USD) gives up initial gains despite United States (US) President Donald Trump expressing confidence on de-escalation in a trade war with China.

    The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, flattens to near 99.00 from the intraday high of 98.86.

    US President Trump signaled on Tuesday that Washington can close a deal with China, however, he didn’t provide details of how much tariffs will be charged. However, Beijing has stated that Washington should stop making threats and conduct negotiations fairly and with mutual respect.

    Meanwhile, the Canadian Dollar (CAD) performs strongly against its major peers, except antipodeans, on Wednesday as President Trump has signaled that he will soon unveil bilateral deals with his trading partners. Such a scenario will ease the global economic uncertainty, which has been escalated in the face of worse-than-expected tariffs announced by Trump on April 2.

    Canadian Dollar PRICE Today

    The table below shows the percentage change of Canadian Dollar (CAD) against listed major currencies today. Canadian Dollar was the strongest against the Swiss Franc.

    USD EUR GBP JPY CAD AUD NZD CHF
    USD 0.19% 0.25% 0.23% 0.05% -0.66% -0.31% 0.54%
    EUR -0.19% 0.04% 0.02% -0.16% -0.81% -0.51% 0.33%
    GBP -0.25% -0.04% -0.02% -0.21% -0.86% -0.56% 0.32%
    JPY -0.23% -0.02% 0.02% -0.20% -0.78% -0.57% 0.33%
    CAD -0.05% 0.16% 0.21% 0.20% -0.59% -0.34% 0.53%
    AUD 0.66% 0.81% 0.86% 0.78% 0.59% 0.31% 1.19%
    NZD 0.31% 0.51% 0.56% 0.57% 0.34% -0.31% 0.88%
    CHF -0.54% -0.33% -0.32% -0.33% -0.53% -1.19% -0.88%

    The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Canadian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent CAD (base)/USD (quote).

    USD/CAD trades at a make-or-break level near the upward-sloping trendline around 1.3800, which is plotted from the May 2021 low of 1.2031 on a weekly timeframe.

    The 20-week Exponential Moving Average (EMA) has started declining near 1.4140, suggesting that the trend has become bearish.

    The 14-week Relative Strength Index (RSI) falls below 40.00 for the first time in almost four years. A fresh bearish momentum would trigger if it stays below the 40.00 level.

    More downside towards the psychological support of 1.3500 and the September 24 low of 1.3430 looks likely if the pair breaks below the round-level figure of 1.3600.

    In an alternate scenario, a recovery move by the pair above the psychological level of 1.4000 will support to move further to near the April 9 low of 1.4075, followed by the April 8 low of 1.4272.

    USD/CAD weekly chart

     

    US Dollar FAQs

    The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022.
    Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.

    The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates.
    When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.

    In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system.
    It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.

    Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.



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  • Canadian Dollar struggles near 1.40 amid soft inflation and trade uncertainty

    Canadian Dollar struggles near 1.40 amid soft inflation and trade uncertainty


    • USD/CAD trades near the 1.4000 area after bouncing from mid-1.38s earlier this week.
    • Softer Canadian inflation and Powell’s tariff warnings pressure the Canadian Dollar outlook.
    • Key resistance stands at 1.4060; technical backdrop skews bearish despite recent rebound.

    USD/CAD hovered near the 1.4000 zone on Tuesday, consolidating after recovering from earlier lows around the 1.3850 region. The Canadian Dollar failed to gain traction despite a cooler-than-expected inflation report for March, while traders brace for the Bank of Canada’s policy decision. Meanwhile, the US Dollar attempted a mild rebound after days of losses tied to ongoing trade tensions with China.

    Canada’s inflation rate slowed to 2.3% annually in March, below expectations and down from 2.6% previously. Month-over-month, CPI rose just 0.3%, missing the 0.7% forecast. The data has slightly softened market expectations that the BoC will hold rates steady at 2.75% in its first policy meeting since June. Markets will closely watch Governor Macklem’s tone, especially as uncertainty rises over how Trump’s aggressive tariff policy may ripple into Canada’s economic outlook.

    On the US side, the Greenback faces persistent pressure from global investors as Trump’s tariff escalation continues to undermine confidence. According to Commerzbank analysts, the complexity and unpredictability of current US trade policy are raising inflation risks while damaging trust among global trading partners. Fed Chair Powell echoed these concerns, warning that the inflationary effects of tariffs could be stronger and more prolonged than initially expected. He added that it’s too early to determine the right path for interest rates and that the Fed is in no rush to act.

    Technically, USD/CAD shows bearish signals overall, even with a modest gain on the day. The pair trades near the top of its daily range between 1.3850 and 1.3980. The Relative Strength Index sits near 37 in neutral territory, while the MACD prints a sell signal. Despite some mixed signals from momentum indicators, moving averages reinforce the downside outlook: the 20-, 100-, and 200-day SMAs, along with the 10-day EMA, all suggest further weakness ahead. Support rests at 1.3827, while resistance levels are located at 1.4002, 1.4060, and 1.4063.

    USD/CAD technical analysis



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  • USD/CAD extends the decline to near 1.3850 amid weaker US Dollar 

    CAD holds range but USD undertone is softening – Scotiabank


    There was a little confusion around the temporary roll-back of US tariffs yesterday. Canada was not included in the round of reciprocal tariffs announced on Liberation Day but Treasury Secretary Scott Bessent said the 10% baseline tariff applied to both Canada and Mexico, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

    CAD gains modestly on the day

    “It turns out that was incorrect, a reflection of how confused policymaking is right now. Other tariffs, of course, remain in place. The CAD has weathered all the recent uncertainty relatively well, despite headwinds from higher market volatility and weaker commodities. Narrowed spreads are providing some support for the CAD and helping nudge our fair value estimate a little lower.”

    “Spot is trading below today’s updated estimated equilibrium though (1.4128) and the USD’s undervaluation may firm up support for USDCAD in the 1.40/1.41 range. The USD is heading for a fourth weekly loss versus the CAD and a weekly close under 1.4107 (50% retracement of the Sep/Feb USD rally) would suggest more downside pressure building on spot.”

    “As it is, there is a clearer strengthening of USD-bearish trend momentum on the intraday and daily charts which suggests the USD is at risk of retesting last week’s low at 1.4025/30 and making a run at 1.3945 (61.8% retracement support). Note the 200-day MA sits at 1.4005.”



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  • USD/CAD strengthens above 1.4100 on tariff pause

    USD/CAD strengthens above 1.4100 on tariff pause


    • USD/CAD rebounds to around 1.4105 in Thursday’s early Asian session.
    • Trump announced a 90-day pause on higher reciprocal tariffs on US trading partners.
    • The US CPI inflation report for March will be in the spotlight later on Thursday. 

    The USD/CAD pair recovers some lost ground to near 1.4105 during the early Asian session on Thursday. The US Dollar (USD) edges higher against the Canadian Dollar (CAD) due to US President Donald Trump’s announcement of a 90-day delay on reciprocal tariffs. The US Consumer Price Index (CPI) inflation report will take center stage later on Thursday. 

    US President Donald Trump said on Wednesday that he authorized a 90-day pause on new tariffs for most US trade partners to 10% to allow trade negotiations with those countries. “The 90-day pause is an encouraging sign that negotiations with most countries have been productive,” said Mark Hackett at Nationwide. “It also injects some much-needed stability into a market rattled by uncertainty. 

    The Federal Reserve (Fed) officials continue to downplay the immediate impact of a potential trade war on the US economy, preferring to emphasize the data as a key policy driver. Traders are now pricing in only a 40% possibility of a Fed rate cut in next month’s meeting, despite the recent market volatility, according to the CME FedWatch tool. 

    Traders will take more cues from the US CPI inflation report for March later on Thursday. The headline CPI is expected to show an increase of 2.6% YoY in March, while the core CPI is estimated to show a rise of 3.0% during the same period.

    Meanwhile, a recovery in Crude Oil prices could lift the commodity-linked Loonie. It’s worth noting that Canada is the largest oil exporter to the US, and higher crude oil prices tend to have a positive impact on the CAD value. 

    Canadian Dollar FAQs

    The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar.

    The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive.

    The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD.

    While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar.

    Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.

     



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  • USD/CAD trades with positive bias around mid-1.4200s as Oil prices tumble to multi-year low

    USD/CAD trades with positive bias around mid-1.4200s as Oil prices tumble to multi-year low


    • USD/CAD attracts some buyers for the second straight day amid a combination of supporting factors.
    • Tumbling Oil prices, domestic political uncertainty, and Friday’s dismal jobs data undermine the Loonie.
    • The risk-off mood benefits the USD’s relative safe-haven status and also acts as a tailwind for the pair.

    The USD/CAD pair attracts some follow-through buying for the second consecutive day on Monday and looks to build on last week’s modest recovery from the 1.4030-1.4025 region or year-to-date low. Spot prices currently trade around mid-1.4200s, up nearly 0.25% for the day, though bulls might wait for a sustained strength beyond the 100-day Simple Moving Average (SMA) before placing fresh amid mixed fundamental cues.

    Crude Oil prices slump to a four-year low amid growing concerns that US President Donald Trump’s sweeping reciprocal tariffs would trigger an all-out global trade war and weaken fuel demand. Moreover, eight OPEC+ members unexpectedly advanced their plan to phase out production cuts, sparking oversupply concerns and further weighing on the black liquid. Apart from this, political uncertainty ahead of the Canadian snap election on April 28, along with Friday’s disappointing domestic employment data, undermines the commodity-linked Loonie and acts as a tailwind for the USD/CAD pair.

    Meanwhile, the risk of a further escalation of US-Canada trade tensions suggests that the path of least resistance for the currency pair is to the upside. In fact, Canadian Prime Minister Mark Carney said on Thursday that the previously announced retaliatory tariffs will remain in effect and that Canada will impose 25% tariffs on all vehicles imported from the US that are not compliant with the USMCA trade deal. This, along with the emergence of some US Dollar (USD) buying following the Asian session dip, turns out to be another factor offering additional support to the USD/CAD pair.

    The USD preserves Friday’s modest recovery gains from a multi-month low on the back of stronger-than-expected US Nonfarm Payrolls (NFP) report and Federal Reserve (Fed) Chair Jerome Powell’s hawkish remarks. Adding to this, the prevalent risk-off environment is seen benefiting the Greenback’s relative safe-haven status. Any meaningful USD appreciation, however, still seems elusive in the wake of bets that a tariffs-driven US economic slowdown might force the Fed to resume its rate-cutting cycle soon. This, in turn, might keep a lid on the USD/CAD pair, warranting caution for bulls.

    Canadian Dollar FAQs

    The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar.

    The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive.

    The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD.

    While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar.

    Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.



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  • USD/CAD extends the decline to near 1.3850 amid weaker US Dollar 

    USD/CAD hangs near multi-month low, below 1.4100 ahead of US/Canadian jobs data


    • USD/CAD trades with negative bias for the fourth successive day amid the prevalent USD selling bias.
    • Worries that Trump’s tariffs might trigger a US recession lift Fed rate cut bets and weigh on the buck.
    • The overnight downfall in Crude Oil prices undermines the Loonie and lends some support to the major.
    • Traders also seem reluctant to place fresh directional bets ahead of the US/Canadian jobs reports.

    The USD/CAD pair remains under some selling pressure for the fourth straight day on Friday and currently trades around the 1.4070 area, down 0.15% for the day. Spot prices hang near a four-month low touched on Thursday and seem poised to heavy weekly losses, though a combination of diverging factors warrants caution for bearish traders.

    The US Dollar (USD) struggles to capitalize on the overnight modest bounce from its lowest level since October amid concerns that US President Donald Trump’s tariffs might trigger a recession and force the Federal Reserve (Fed) to resume its rate-cutting cycle. This led to the overnight slump in US Treasury bond yields and kept the USD bulls on the defensive, which continues to exert downward pressure on the USD/CAD pair.

    However, the risk of a further escalation of the US-Canada trade war might hold back traders from placing aggressive bullish bets around the Canadian Dollar (CAD). In fact, Canadian Prime Minister Mark Carney said on Thursday that the previously announced retaliatory tariffs will remain in effect and that Canada will impose 25% tariffs on all vehicles imported from the US that are not compliant with the USMCA trade deal.

    Meanwhile, Crude Oil prices consolidated Thursday’s steep decline to a multi-week low amid worries that the widening trade war may dent global economic growth and dampen fuel demand. This could further undermine the commodity-linked Loonie and contribute to limiting the downside for the USD/CAD pair. Furthermore, traders might opt to wait for the US/Canadian jobs report and Fed Chair Jerome Powell’s speech.

    Tariffs FAQs

    Tariffs are customs duties levied on certain merchandise imports or a category of products. Tariffs are designed to help local producers and manufacturers be more competitive in the market by providing a price advantage over similar goods that can be imported. Tariffs are widely used as tools of protectionism, along with trade barriers and import quotas.

    Although tariffs and taxes both generate government revenue to fund public goods and services, they have several distinctions. Tariffs are prepaid at the port of entry, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and businesses, while tariffs are paid by importers.

    There are two schools of thought among economists regarding the usage of tariffs. While some argue that tariffs are necessary to protect domestic industries and address trade imbalances, others see them as a harmful tool that could potentially drive prices higher over the long term and lead to a damaging trade war by encouraging tit-for-tat tariffs.

    During the run-up to the presidential election in November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy and American producers. In 2024, Mexico, China and Canada accounted for 42% of total US imports. In this period, Mexico stood out as the top exporter with $466.6 billion, according to the US Census Bureau. Hence, Trump wants to focus on these three nations when imposing tariffs. He also plans to use the revenue generated through tariffs to lower personal income taxes.



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  • USD/CAD consolidates in a range above 1.4300 mark amid mixed cues

    USD/CAD consolidates in a range above 1.4300 mark amid mixed cues


    • USD/CAD lacks firm intraday direction on Monday amid a combination of diverging factors. 
    • Fed rate cut bets and concerns about a slowing economy continue to weigh on the Greenback.
    • Subdued Crude Oil prices undermine the Loonie and support the pair amid the risk-off mood.  

    The USD/CAD pair struggles to capitalize on its modest bounce from the monthly low touched last Wednesday and kicks off the new week on a subdued note amid mixed cues. Spot prices, however, hold above the 100-day Simple Moving Average (SMA) pivotal support and currently trade around the 1.4300 mark, nearly unchanged for the day.

    The US Dollar (USD) selling bias remains unabated for the third successive day on Monday as the uncertainty over US President Donald Trump’s aggressive trade policies continues to fuel worries about a tariff-driven US economic slowdown. This remains supportive of the growing market acceptance that the Federal Reserve (Fed) could resume its rate-cutting cycle and keep the USD bulls on the defensive, which, in turn, acts as a headwind for the USD/CAD pair. 

    Meanwhile, the USD bulls largely shrug off signs of rising inflation in the US. In fact, the US Personal Consumption Expenditure (PCE) Price Index showed on Friday that the core gauge that excludes volatile food and energy prices rose 0.4% in February, marking the biggest monthly gain since January 2024 and lifting the yearly rate to 2.8%. Moreover, the University of Michigan’s 12-month inflation expectations soared to the highest level in nearly 2-1/2 years in March. 

    However, the prevalent risk-off environment, ahead of US President Donald Trump’s reciprocal tariffs due to be announced on Wednesday, helps limit the downside for the safe-haven Greenback. Trump last week rattled markets by imposing a 25% tariff on all non-American cars and light trucks. Adding to this, a report over the weekend said that Trump will consider higher tariffs against a broader range of countries, which will take effect from April 2. 

    Furthermore, hopes for a Ukraine peace deal keep Crude Oil prices below a multi-week high touched last Wednesday, which further seems to undermine the commodity-linked Loonie and lend some support to the USD/CAD pair. This, in turn, warrants some caution before positioning for the resumption of the currency pair’s recent well-established downtrend from the vicinity of mid-1.4500s, or the monthly swing high touched on March 4. 

    Canadian Dollar FAQs

    The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar.

    The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive.

    The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD.

    While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar.

    Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.

     



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  • USD/CAD extends the decline to near 1.3850 amid weaker US Dollar 

    Slides for third straight trading day


    • USD/CAD falls further to near 1.4250 amid strength in the Canadian Dollar.
    • Investors doubt that the BoC will continue reducing interest rates after the release of the hot CPI report for February.
    • The risk sentiment remains cautious as US President Trump is expected to announce significant tariffs on April 2.

    The USD/CAD pair extends its downside move for the third day in a row on Wednesday and slides to near 1.4250. The Loonie pair weakens as the Canadian Dollar (CAD) traders higher against its peers, except antipodeans.

    Canadian Dollar PRICE Today

    The table below shows the percentage change of Canadian Dollar (CAD) against listed major currencies today. Canadian Dollar was the strongest against the British Pound.

      USD EUR GBP JPY CAD AUD NZD CHF
    USD   -0.03% 0.30% 0.15% -0.20% -0.39% -0.48% 0.10%
    EUR 0.03%   0.33% 0.15% -0.17% -0.35% -0.45% 0.12%
    GBP -0.30% -0.33%   -0.14% -0.49% -0.67% -0.78% -0.17%
    JPY -0.15% -0.15% 0.14%   -0.34% -0.55% -0.63% -0.04%
    CAD 0.20% 0.17% 0.49% 0.34%   -0.16% -0.28% 0.32%
    AUD 0.39% 0.35% 0.67% 0.55% 0.16%   -0.10% 0.50%
    NZD 0.48% 0.45% 0.78% 0.63% 0.28% 0.10%   0.59%
    CHF -0.10% -0.12% 0.17% 0.04% -0.32% -0.50% -0.59%  

    The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Canadian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent CAD (base)/USD (quote).

    The CAD rises as investors hope that the Bank of Canada (BoC) could adopt a neutral monetary policy stance after remaining significantly dovish since June 2024. These expectations have stemmed from February’s Consumer Price Index (CPI) report, which showed that inflation accelerated at a faster-than-expected pace.

    However, the faith of the Loonie is tied to United States (US) President Donald Trump’s tariff agenda. Trump is poised to announce a slew of tariffs for his trading partners on April 2.

    Meanwhile, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, struggles to break above the immediate resistance of 104.50, which is the highest level in almost three weeks. Going forward, investors will focus on the US Personal Consumption Expenditure Price Index (PCE) data for February, which will be released on Friday. The inflation data will influence market expectations for the Federal Reserve’s (Fed) monetary policy outlook.

    USD/CAD holds above the 100-period Exponential Moving Average (EMA), which is around 1.4226, suggesting that the overall trend is bullish.

    The 14-period Relative Strength Index (RSI) oscillates in the 40.00-60.00 range, indicating a sideways trend.

    Going forward, an upside move would emerge above the March 10 high of 1.4470, which will open the door toward the psychological resistance of 1.4500 and the January 30 high of 1.4595.

    On the contrary, a breakdown below the February 14 low of 1.4151 by the pair would expose it to the December 9 low of 1.4094, followed by the December 6 low of 1.4020.

    USD/CAD daily chart

    Canadian Dollar FAQs

    The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar.

    The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive.

    The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD.

    While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar.

    Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.

     



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  • USD/CAD strengthens above 1.4100 on tariff pause

    USD/CAD flat lines below mid-1.4300s after Canada’s PM calls snap election


    • USD/CAD struggles to gain any meaningful traction on Monday amid mixed cues.
    • Fed rate cut bets prompt some USD selling and act as a headwind for the major.
    • Softer Oil prices and Canadian politics undermine the Loonie and lend support.

    The USD/CAD pair kicks off the new week on a softer note amid the emergence of some selling around the US Dollar (USD), though it lacks bearish conviction and has now reversed an Asian session dip to the 1.4325 region. Spot prices, however, remain confined in Friday’s broader range and currently trade just below mid-1.4300s, nearly unchanged for the day.

    Even though the Federal Reserve (Fed) gave a bump higher to its inflation projection, investors seem convinced that a tariff-driven US economic slowdown might force the central bank to resume its rate-cutting cycle soon. This, along with a positive risk, fails to assist the safe-haven USD to build on a three-day-old recovery move from a multi-month low and turns out to be a key factor acting as a headwind for the USD/CAD pair. 

    Meanwhile, Crude Oil prices attract some sellers and move away from a three-week high touched on Friday as traders brace for US President Donald Trump’s so-called reciprocal tariffs on April 2. Adding to this hopes for a positive outcome from Russia-Ukraine peace talks further weigh on the black liquid, which, in turn, undermines the commodity-linked Loonie and helps limit any meaningful downside for the USD/CAD pair. 

    Furthermore, Canada’s new Prime Minister, Mark Carney, has called for a snap election in the country on April 28. This further holds back traders from placing aggressive bullish bets around the Canadian Dollar (CAD), which suggests that the path of least resistance for the USD/CAD pair is to the upside. That said, last week’s failure near the 1.4400 mark makes it prudent to wait for strong follow-through buying before placing fresh bullish bets. 

    Moving ahead, traders now look forward to the release of flash US PMI prints later during the North American session. Apart from this, speeches by influential FOMC members and the broader risk sentiment will drive the USD demand. This, along with Oil price dynamics, should produce short-term opportunities around the USD/CAD pair. Nevertheless, the fundamental backdrop warrants caution before placing fresh directional bets.

    Canadian Dollar FAQs

    The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar.

    The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive.

    The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD.

    While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar.

    Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.

     



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