The Canadian dollar exchange rate is influenced by various factors, including commodity prices, primarily oil prices. As a major exporter of natural resources, especially oil, Canada depends on demand for its products, with the US being their primary consumer. Due to the strong impact of oil prices on the exchange rate, CAD is considered a commodity currency. Other factors contributing to the CAD’s volatility include global commodity prices, especially oil, as fluctuations in these markets directly affect Canada’s export revenues. Changes in trade relations, particularly with key partners like the United States, also impact the CAD’s exchange rate.
Economic indicators such as GDP growth, employment rates, and inflation significantly impact the USD’s value. Changes in U.S. monetary policy, particularly interest rate adjustments by the Federal Reserve, can strengthen or weaken the dollar against other currencies. In this article, Benzinga offers a comprehensive USD/CAD forecast by combining technical and fundamental analysis to provide a clearer picture of the currency pair’s potential future movements. Whether you’re a seasoned market expert or a curious newcomer, this analysis will provide you with essential insights for trading this important currency pair.
The CME Group’s FedWatch Tool indicated a nearly 80% chance that the US central bank will maintain the status quo in June. The markets, however, are still pricing in a greater chance of at least three 25-basis-point (bps) Fed rate cuts by the end of this year. Moreover, investors remain worried about a recession on the back of US President Donald Trump’s rapidly shifting stance on trade policies, which act as a headwind for the USD. In fact, Trump announced 100% tariffs on movies produced outside the US on Sunday and also indicated that he plans to impose fresh tariffs on pharmaceutical imports over the next two weeks. Meanwhile, the OPEC+ decision to speed up output increases continues to stoke fears of oversupply and might cap the upside for Crude Oil prices. This might hold back traders from placing aggressive bullish bets around the Canadian Dollar (CAD) ahead of the monthly jobs report from Canada and lend support to the USD/CAD pair.
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US President Donald Trump reignited global economic anxiety after announcing a blanket 10 percent tariff on all imports, with even higher duties placed on nations like China. While the move is intended to support domestic industries, investors interpreted it as a sign of potential retaliation, strained trade relationships, and a higher risk of recession. ActionForex.com was set up back in 2004 with the aim to provide insightful analysis to forex traders, serving the trading community for over a decade. Empowering the individual traders was, is, and activ trades review will always be our motto going forward. Saqib Iqbal is a market analyst, prop fund trader and mentor, serving the industry with his analysis and educational content since 2011. The author has great exposure to different financial markets and institutions.
- By staying well-informed and responsive to evolving market conditions, traders can better position themselves to capitalize on opportunities within the USD/CAD market.
- These predictions are intended as informational guidance only and are not guarantees.
- USD/CAD tests key inflection zone below psychological resistance.
- Please note that daily forecasts are subject to change based on market volatility and news events.
- This currency pair is also known as the “Loonie”, a nickname derived from the picture of a loon, a distinctive bird which appears on one side of the Canada’s gold-colored, one Dollar coin.
With that being said, the moving averages, the 50 day EMA and the 200 day EMA just above. And those could cause a little bit of dynamic resistance, but the 1.39 level and the 1.38 level underneath both are areas of potential support. You can even make an argument for a little bit of a falling wedge, but really at this point, I think you’ve got a potential move towards a 1.42 level if the US dollar continues to strengthen overall. US Dollar to Canadian Dollar exchange rate prediction for tomorrow and the next trading days.
- We recommend that you seek independent financial advice and ensure you fully understand the risks involved before trading.
- Inflation is another economic value that is important for this pair.
- Economic indicators such as GDP growth, employment rates, and inflation significantly impact the USD’s value.
- Events in the neighboring US economy also have a strong influence.
- The author has great exposure to different financial markets and institutions.
US Dollar to Canadian Dollar exchange rate chart for the last 8 hours and exchange rate forecast for the next 8 hours. Find out how the EUR/USD, GBP/USD, USD/JPY, and other currency pairs could change in 2024. In its reports, the central bank highlights that higher interest rates help ease price pressures in the country, leading to reduced inflation.
However, the dollar rallied on Monday after canadian forex brokers reports of a deal between China and the US. Such a move might lead to a pause in tariffs that would lift the cloud of uncertainty over both economies. Explore more forecasts involving United States Dollar (USD) paired with other major currencies. Monthly and yearly forecasts provide reference points for medium to longer-term planning.
Chart Pattern Recognition
The USD/CAD currency pair faced a turbulent trading week ending April 5, 2025, as global economic uncertainties deepened. From Trump’s sweeping new tariffs to Canada’s underwhelming job market report, both the US dollar and Canadian dollar saw major pressures. While USD/CAD dipped below critical support during the week, a late rebound kept the pair within a consolidative range, leaving traders guessing where momentum might head next. The softer-than-expected inflation data has increased the probability of Fed policy easing later this year, with markets now assigning a higher likelihood of the first rate cut occurring in September, according to CME FedWatch. The broader macroeconomic narrative now turns to incoming Fed communications, labor market data, and global trade risks, which will further clarify the central bank’s policy path.
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Inflation is another economic value that is important for this pair. It is measured among others by the CPI (Core Price Index) and the PPI (Production Price Index). They are key indicators to measure inflation and changes in purchasing trends. The BoC is likewise set to continue easing interest rates through 2025, at least at a faster pace than the Fed is expected to, which will apply pressure on CAD’s already-rising rate differential. The BoC is under significant pressure to continue lowering interest rates.
Overview of the USD/CAD currency pair
The US and China finally met over the weekend after weeks of a stalemate. The two nations have been at war with each hiking tariffs to unsustainable levels. This trade war has caused a lot of anxiety in the markets, with US assets suffering the most. Economists have even predicted a global recession due to these tariffs.
Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD. Adding to this, the Trump administration is reportedly considering lowering the tariffs on China to 50% from 145% as soon as next week. This comes ahead of the crucial US-China tariff negotiations over the weekend and helps to ease market concerns that an all-out trade war might trigger a US recession, which, in turn, should act as a tailwind for the Greenback. US Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer are set to meet their Chinese counterparts in Switzerland on Saturday to discuss trade and economic issues. The USD/CAD pair tells the trader how many Canadian dollars (the quote currency) are needed to purchase one U.S. dollar (the base currency).
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet. These comments will offer fresh insights into whether the Fed views the recent disinflation trend as sufficient to warrant rate cuts or whether a more cautious approach will prevail. Here’s some of the best regulated forex brokers in Canada to check out.
The 30-day average rate is C$ 1.3866, with a +0.59% difference compared to today. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you’re a beginner or an expert, find the right partner to navigate the dynamic Forex market.
The USD/CAD currency pair remains a key focus for traders and financial analysts globally. Recent trends tickmill review in its exchange rate have highlighted the pair’s responsiveness to economic developments, geopolitical factors and changes in monetary policy, presenting a critical opportunity for forex traders. Representatives of this group usually experience a price decline when the investment environment worsens and demand for natural resources falls. Conversely, an increase in oil prices provides support for such currencies.
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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. 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.
While their prolific writing career includes seven books and contributions to numerous financial websites and newswires, much of their recent work was published at Benzinga. The USD/CAD pair is currently in a bullish phase after undergoing a minor sideways correction in recent trading sessions. Supporting this move, the US Dollar Index (DXY) has shown continued strength, driven by rising US Treasury yields and solid US labor market performance.
