Canadian dollar weakens on trade tensions and U.S. inflation
The Canadian dollar weakened on Wednesday, with the U.S. dollar rising against the loonie as renewed trade tensions with the United States and sticky U.S. inflation increased pressure on the currency. USD/CAD was last around C$1.3876, up 0.27%, after reaching an intraday high of C$1.3893 and a low of C$1.3836. The loonie earlier fell to C$1.3892 per U.S. dollar, its weakest level since Aug. 19, while the Canadian dollar was around 72.07 U.S. cents. The Canadian currency came under renewed pressure after U.S. inflation data showed price pressures remained elevated in July, strengthening the case for a Federal Reserve rate hike and supporting the U.S. dollar. Headline personal consumption expenditures inflation held at 3.7% annually, above the 3.6% expected, while core PCE remained at 3.3%. Both measures rose 0.2% from the previous month. The data adds to pressure on the Canadian dollar at a time when Ottawa and Washington are escalating their trade dispute. Canada has announced retaliatory tariffs on about C$27.6 billion ($20 billion) of U.S. goods after Washington imposed 50% tariffs on a similar value of Canadian imports. Canada announced C$27.6 billion ($20 billion) in retaliatory tariffs on U.S. goods on Tuesday, matching the value of new U.S. tariffs and targeting more than 700 products. The measures are due to take effect on Sept. 8. U.S. President Donald Trump escalated his rhetoric on Wednesday, saying it was "time to teach Canada you can't do this anymore," adding to uncertainty over whether the two countries can revive stalled trade negotiations. The Canadian dollar is also taking direction from broader moves in the U.S. currency. The dollar was modestly higher against major currencies on Wednesday as investors positioned ahead of U.S. personal consumption expenditures inflation data, which could influence expectations for Federal Reserve policy. The latest inflation figures could further widen expected interest-rate support for the U.S. dollar, particularly as markets reassess the chances of a Fed rate hike in September. Futures markets increased the probability of a September hike following the data, while inflation remains well above the central bank's 2% target. For the loonie, the combination of higher U.S. rate expectations and trade uncertainty presents a double headwind. Investors are also watching oil prices, given Canada's status as a major energy exporter and the currency's sensitivity to movements in crude.
BNY's Geoff Yu reports that Washington is considering further trade penalties against Canada after Ottawa's dollar-for-dollar retaliation to new U.S. tariffs. Canada plans to double counter-tariffs on U.S. steel and aluminum and add new duties on a range of goods.
US Poised to Cut Canadian Steel and Aluminum Tariffs to 25%, Autos to 15%
The United States and Canada are close to a trade deal that would lower tariffs on certain steel and aluminum imports from 50% to 25% and reduce tariffs on Canadian auto imports to 15% from 25%, according to a Bloomberg report on August 20, 2026, citing sources close to the negotiations. Details are still being finalized and may not apply to all goods at the same rate. Some downstream products could still face different tariff levels. The progress comes after President Donald Trump said the US had reached a deal with Canada and temporarily suspended the 50% tariffs to allow talks before a Friday deadline. The proposal under discussion would give Canada terms similar to those for the United Kingdom, which received 25% steel tariffs, and Japan and South Korea, which received 15% auto tariffs. Canadian Prime Minister Mark Carney said negotiators are moving toward the best possible deal for the country's strategic industrial sectors, but tariffs of 15% to 25% remain far above historical norms and could create domestic political pressure, as well as pressure on Mexico, which has not yet reached a deal with the US. Financial markets responded positively, with the Canadian dollar strengthening to around 1.3809 per US dollar, its strongest level since June 1. Algoma Steel Group shares jumped 16.6% in Toronto, while US steel producers such as Nucor fell 5.9% and Century Aluminum dropped 4.6%. Canada is the largest source of US aluminum imports, accounting for roughly half of total US consumption, but US industry groups are pressing against tariff cuts covering all products, warning that around 125,000 American aluminum industry jobs could be affected.
TD Securities expects Canada July jobs to rise 20k, extending recovery
TD Securities strategists expect Canada’s July Jobs Report to confirm ongoing labour market strength, with employment rising another 20,000, matching consensus and extending the recovery of 2026 job losses. The strategists view this labour resilience as a factor favouring the Canadian dollar against the US dollar.
Euro strengthens against Canadian Dollar after German industrial output beats forecasts
EUR/CAD rose to around 1.6160 during European trading on Friday, snapping a two-day losing streak, after data from Destatis showed German industrial output exceeded expectations. The stronger-than-expected production figures supported the Euro, which held its ground against the Canadian Dollar. The currency cross maintained its intraday gains as the European session progressed.
Canadian Dollar holds gains as oil rebounds and Fed rate-hike bets fade
The Canadian Dollar held gains against the US Dollar on Thursday, keeping USD/CAD under pressure near the 1.4000 level. Rebounding crude oil prices, driven by Houthi missile attacks on Saudi oil tankers in the Red Sea, underpinned the commodity-linked Loonie. Hopes for a US-Iran peace deal and receding Federal Reserve rate-hike expectations kept the US Dollar on the defensive. Traders remained cautious ahead of Friday's US Nonfarm Payrolls and Canadian employment reports, which are expected to provide fresh direction for the pair.
Canadian Dollar firms as Oil rebounds, USD softens on weaker ADP data
The Canadian Dollar strengthened against the US Dollar on Wednesday, with USD/CAD trading around 1.4040, down 0.14% on the day. The move came as the Canadian Dollar benefited from a rebound in Oil prices, while the US Dollar softened following weaker-than-expected ADP employment data.
Dollar buying may strengthen if US employment proves resilient — key economic indicators to watch this week
Among the major economic indicators released from August 3 to 7, the ADP employment report, a leading indicator for US nonfarm payrolls, and the ISM non-manufacturing index are expected to set the direction for the dollar. New Zealand's April–June quarter employment report, due on the 5th, is forecast to show a 0.3% quarter-on-quarter rise in employment and an unemployment rate of 5.3%. If the labor market holds firm, buying of the New Zealand dollar could intensify. The US ADP employment report for July, also on the 5th, is expected to show a gain of 75,000, slowing from the previous month. A weak result could trigger dollar selling on expectations of earlier rate cuts, while a solid reading would support dollar buying. Canada's July employment report, due on the 7th, is forecast to show a gain of 15,000 jobs and an unemployment rate of 6.5%. As it is released simultaneously with the US employment report, the reaction in the US dollar–Canadian dollar pair could be complex.
The USD/CAD pair edged higher during the Asian session on Friday, snapping a three-day losing streak that had taken it to its lowest level since June 17. The move came as the Canadian dollar retreated on sliding oil prices while the US dollar recovered on Federal Reserve rate hike expectations and Middle East risks.
USD/CAD Rebounds Above 1.4050, Constructive Outlook Prevails Above 100-Day SMA
The USD/CAD pair traded in positive territory near 1.4050 during the early European session on Thursday. The US Dollar strengthened against the Canadian Dollar on hawkish signals from the US Federal Reserve.
Scotiabank says Canadian dollar range holds against US dollar with Fed and BoC in focus
Scotiabank strategists Shaun Osborne and Eric Theoret say the Canadian dollar is broadly stable around 1.41 against the US dollar, with performance driven mainly by front-end rate differentials despite support from stronger oil prices.
USD/CAD edges higher as US Dollar rebounds from bearish gap
USD/CAD edged higher on Monday, paring earlier losses as the US Dollar rebounded after opening the week with a bearish gap. The Greenback initially weakened as a temporary pause in attacks between the United States and Iran improved risk sentiment.
Canadian Dollar falls to one-week low vs USD on divergent BoC-Fed bets, Trump tariffs
The Canadian Dollar fell to a one-week low against the US Dollar on Tuesday. The USD/CAD pair gained positive traction for the second straight day, buying on the previous day's solid rebound from the 1.4000 psychological mark, which was its lowest level since June 17. The move was driven by divergent Bank of Canada and Federal Reserve policy bets and concerns over Trump tariffs.
Rate divergence weighs on Canadian dollar against US dollar, TD Securities says
TD Securities strategists say softer Canadian CPI data is lifting USD/CAD as rate divergence remains a key driver. They argue broad US dollar strength should limit USD/CAD downside below 1.40. Higher oil prices are seen as supportive for the Canadian dollar on crosses but not against the US dollar.
Euro weakens against Canadian dollar after German PPI falls in June
The euro remained weaker against the Canadian dollar on Monday, with EUR/CAD trading around 1.6030 in early European hours after paring daily losses. The currency cross depreciated as the euro struggled following the release of Germany’s Producer Price Index data for June, which showed a decline.
USD/CAD Tests 1.4000 After Breaking Below 50-Day EMA
USD/CAD extended its losses for a second straight day, trading around 1.4010 during Asian hours on Monday. The pair is moving downward within a descending channel on the daily chart, signaling an ongoing bearish bias.
USD/CAD edges lower toward 1.3970 as Canadian dollar gains on oil fears
The USD/CAD pair traded marginally lower at around 1.4033 during the European session on Friday, with further downside likely toward 1.3970. The Canadian dollar outperformed its major peers amid fears that oil prices could accelerate further.
Bank of Canada holds key rate at 2.25%, sees growth picking up in second half
The Bank of Canada left its benchmark overnight rate unchanged at 2.25% on Wednesday, marking the sixth consecutive hold after an aggressive easing cycle last year. The central bank said growth is picking up and inflation is projected to ease gradually from its recent spike, with the economy showing signs of improvement. It slightly raised growth forecasts for 2027 and 2028 but cut the 2026 projection to 0.7% from 1.2% in April, reflecting a weaker start to the year. The Bank of Canada raised its 2026 inflation forecast to 2.5% from 2.3% in April, but said inflation should remain near the midpoint of its 1% to 3% target range over the next two years.
Bank of Canada expected to hold rates at 2.25% as oil supports Canadian dollar
ING’s Francesco Pesole expects the Bank of Canada to keep rates at 2.25%, with limited incentive to push back against modest December tightening pricing. He sees June CPI potentially falling below 3.0% as petrol prices drop, while core remains near 2.0%.
Euro snaps three-day losing streak against Canadian Dollar
The Euro bounced back against the Canadian Dollar on Wednesday, snapping a three-day losing streak. The pair traded 0.13% higher near 1.6078 during the European session. The move comes as markets eye the Bank of Canada's upcoming policy decision.
Canadian Dollar-Yen Forecast Range 112.50–116.00 Yen, Supported by Higher Oil Prices and Yen Weakness
According to a fundamental analysis of the Canadian dollar-yen pair distributed by Fisco on the 15th, the forecast range is 112.50 yen to 116.00 yen. Buying factors include the view that the impact of US tariff measures is not severe, Canadian dollar buying against the backdrop of recovering crude oil prices, the continuation of the yen's weakening trend, and speculation regarding the Bank of Canada's policy rate.
Dollar rises on geopolitical risks, rate hike expectations
The dollar index rose 0.18% to 101.14, driven by safe-haven demand after renewed US-Iran tensions and expectations of further Federal Reserve rate hikes. Over the past week, the index gained 0.23% as missile exchanges and Strait of Hormuz tensions pushed oil prices higher, fueling inflation concerns. Minutes from the Fed's June meeting showed a few officials supported a rate hike, and markets now price a 62% chance of a September increase, up from 58% a week ago. The Canadian dollar edged up after Canada added 18,200 jobs in June and unemployment fell to a nearly two-year low, reducing the likelihood of a Bank of Canada rate cut. The Swiss franc fell 0.42% as the Swiss National Bank held its policy rate at zero, while the Chinese yuan was nearly flat, with losses limited by the People's Bank of China's midpoint fixing of 6.7972 per dollar.
USD/CAD flat near 1.4160 as higher oil prices support Canadian Dollar
The Canadian Dollar traded flat against the US Dollar at around 1.4160 during European trading on Monday, supported by higher oil prices. The currency held firm against other major peers as crude oil gains lent strength to the commodity-linked loonie. The pair showed little movement despite the broader firmness in the Canadian Dollar.
Canadian Dollar edges lower as US launches new wave of strikes against Iran
The Canadian Dollar weakened against the US Dollar on Monday, with USD/CAD rising to near 1.4165 in Asian trading, snapping a four-day losing streak. The move came as the US Dollar strengthened amid lingering tensions over the US-Iran conflict, following a new wave of US strikes against Iran.
Canadian Dollar consolidates near fair value, Scotiabank says
Scotiabank strategists Shaun Osborne and Eric Theoret note the Canadian Dollar is effectively flat versus the US Dollar and trading close to their fair value estimate around 1.4158. They expect the recent deterioration in spreads to stabilize, easing downside pressure on the Canadian Dollar.
AI boom reshapes FX markets through equity hedging flows
The surge in artificial intelligence-linked equities is having a bigger impact on currency markets than traditional economic fundamentals, according to Bank of America. The bank argues that foreign exchange hedging by global investors has become an increasingly important driver of major currency moves. The Japanese yen has faced the greatest downside pressure among G10 currencies as overseas investors hedge their exposure to Japan's booming equity market, with the Nikkei 225 significantly outperforming other major equity indices since the second quarter of 2025. Bank of America estimates these flows may have weighed on the yen by as much as 10%, helping explain why the currency has remained weak despite supportive balance-of-payments data and higher Japanese interest rate expectations. Outside Japan, hedging flows have generally supported currencies such as the Swedish krona, Swiss franc, Canadian dollar, and Australian dollar, while the U.S. dollar may have experienced modest selling pressure. Looking ahead, the risk-reward has shifted in favor of a stronger yen, as a slowdown in the AI-driven equity rally combined with possible Japanese foreign exchange intervention could reverse recent weakness, leading the bank to favor lower CHF/JPY and CAD/JPY.
USD/CAD consolidates above 1.4200 ahead of US NFP report
The USD/CAD pair is consolidating above the 1.4200 level during the Asian session on Friday as traders await the release of the crucial US monthly employment data before committing to further positions.
Sell the Canada Dollar Now, Just in Time for the Fourth of July
September Canadian dollar futures present a selling opportunity on further price weakness, with prices trending lower and recently hitting a contract low. A move below chart support at the contract low of 0.7043 would trigger a sell signal, targeting a downside objective of 0.6850 or below. Technical resistance for placing a protective buy stop is located at 0.7125. The U.S. dollar index is in rally mode amid expectations of a more hawkish Federal Reserve under new Chair Kevin Warsh, while the U.S. economy continues to show resilience.
Euro drops against Canadian Dollar despite stronger German Retail Sales
EUR/CAD depreciated after two days of gains, trading around 1.6220 during early European hours on Tuesday. The currency cross remained subdued as the Euro held losses following the release of German Retail Sales data.
Scotiabank says yield spreads drive extended Canadian dollar slump
Scotiabank strategists Shaun Osborne and Eric Theoret note that the Canadian dollar has been in a near straight-line decline since early May, driven by wider US–Canada yield spreads, as USD/CAD continues its grind higher.
Canadian Dollar falls as US Dollar hits year-to-date highs and Oil weakens
The Canadian Dollar declined 0.40% on Tuesday as the US Dollar reached fresh year-to-date highs and falling Oil prices weighed on the currency. USD/CAD traded above 1.4200 for the first time since April 2025.
NBC says BoC patience guided by contained core inflation
National Bank of Canada economists Matthieu Arseneau and Alexandra Ducharme note that Canadian headline inflation rose to 3.2% in May, above the Bank of Canada’s target range, driven mainly by higher gasoline and food prices.
USD/CAD trades near April 2025 highs amid Iran uncertainty
The USD/CAD pair opened the week on a positive note, trading near the 1.4170-1.4175 region during the Asian session, close to its highest level since April 2025 set last Friday. The Canadian Dollar remains under pressure as a bullish US Dollar benefits from safe-haven demand driven by Iran-related uncertainty.
Canadian dollar hits seven-month low after Fed signals hawkish shift
The Canadian dollar fell to a seven-month low against the U.S. dollar on Wednesday after the Federal Reserve signaled a more hawkish stance. The loonie traded 0.6% lower at 1.4075 per U.S. dollar, after touching its weakest intraday level since November at 1.4080. The Federal Open Market Committee kept the federal funds rate at 3.50% to 3.75% in its first decision under new chair Kevin Warsh, while its updated dot plot projected a year-end 2026 rate of 3.8%, up from 3.4% in March, implying a 25-basis-point hike this year. Nine Fed officials now expect a rate increase by the end of 2026, boosting the greenback across currency markets. Oil prices settled nearly 1% higher at $76.79 a barrel, and gold dropped 2% on the hawkish tone.