USD/CAD Forecast and News
USD/CAD Price Forecast: Trades sideways above 1.4300
The USD/CAD pair ticks higher to near 1.4330 in European trading hours on Friday but remains inside Thursday’s trading range. The Loonie pair is marginally higher even though the US Dollar trades strongly, suggesting the Canadian Dollar also trades firmly.
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EUR/USD remains offered and challenges 1.0800
The intense recovery in the US Dollar keeps the price action in the risk complex depressed, forcing EUR/USD to recede further and put the key support at 1.0800 to the test on Friday.
GBP/USD breaks below 1.2900 on stronger Dollar
Persistent buying pressure on the Greenback has pushed GBP/USD to multi-day lows below the 1.2900 level, as investors continue to digest the recent interest rate decisions from both the Fed and the BoE.
USD/JPY surrenders intraday gains as US Dollar advances
USD/JPY falls back as the US Dollar gains on the Fed’s support for a restrictive policy stance. US President Trump’s tariff policies are expected to boost US inflation and weigh on economic growth. Japan’s National CPI cooled down in February.
Gold meets support around the $3,000 mark
The combined impact of a stronger US Dollar, continued profit taking, and the effects of Quadruple Witching weighed on Gold, pulling its troy ounce price down to around the pivotal $3,000 level on Friday.
WTI remains stable above $68.00, poises for a second straight weekly gain
West Texas Intermediate Oil price holds ground for the third successive session, trading around $68.40 per barrel during Asian hours on Friday. Oil prices remain on track for their second consecutive weekly increase, driven by new United States (US) sanctions on Iran.
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USD/CAD YEARLY FORECAST
How could USD/CAD move this year? Our experts make a USD/CAD update forecasting the possible moves of the Canadian dollar (CAD) - US dollar (USD) pair during the whole year. Don't miss our 2025 USD/CAD forecast!
USD/CAD FORECAST 2025
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. The Canadian Dollar is poised to continue falling in the first quarter. However, CAD investors will be looking to reassess the state of play between the Fed and the BoC heading into the middle quarters of the year. Read more details about the forecast.
2025 OUTLOOK FOR USD/CAD
Canadian Prime Minister Justin Trudeau is having difficulty keeping his government on an even keel. Political turmoil at both home and abroad will threaten the Canadian Dollar heading into 2025.
With the CAD testing multi-year lows and sending the Dollar into the attic, momentum traders will be looking hungrily to collect into bullish CAD positions to force a downside correction with USD/CAD price action testing into overbought territory.
ORGANIZATIONS, PEOPLE AND ECONOMIC DATA THAT INFLUENCE USD/CAD
In Canada, the organizations and people that affect the most the moves of the pair are:
- Bank of Canada (BoC, Canada’s Central bank) that issues statements and decides on the interest rates of the country. Its president is Tiff Macklem.
- Canadian Government and its Department of Finance that implement policies that affect the economy of the country.
- CAPP (Canadian Association of Petroleum Producers): Canada being a prominent oil and natural gas producer, the trade organization of that industry is very important.
In the USA, we have:
- The US Government: events as administration statements, new laws and regulations or fiscal policy can increase or decrease the value of the US Dollar and the currencies traded against it, in this case, the Canadian Dollar.
- Fed, the Federal Reserve of the United States whose president is Jerome Powell. The Fed controls the monetary policy, through active duties such as managing interest rates, setting the reserve requirement, and acting as a lender of last resort to the banking sector during times of bank insolvency or financial crisis.
In terms of economic data, we should highlight the Trade Account Balance, a balance between exports and imports of total goods and services. A positive value shows trade surplus, while a negative value shows trade deficit. It is an event that generates some volatility for the USD/CAD. If a steady demand in exchange for CAD exports is seen, that would turn into a positive growth in the trade balance, and that should be positive for the CAD.
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.
Jerome Powell
Jerome Powell took office as chairman of the Board of Governors of the Federal Reserve System in February 2018, for a four-year term ending in February 2022. His term as a member of the Board of Governors will expire January 31, 2028. Born in Washington D.C., he received a bachelor’s degree in politics from Princeton University in 1975 and earned a law degree from Georgetown University in 1979. Powell served as an assistant secretary and as undersecretary of the Treasury under President George H.W. Bush. He also worked as a lawyer and investment banker in New York City. From 1997 through 2005, Powell was a partner at The Carlyle Group.
Jerome Powell Fed's Profile and Wikipedia
Tiff Macklem
Tiff Macklem was born in Montréal, Quebec, in 1961. He was appointed Governor of the Bank of Canada, effective 3 June 2020, for a seven-year term. He is the tenth governor of the Bank of Canada. As Governor, he is also Chairman of the Board of Directors of the Bank for International Settlements (BIS). He currently chairs both, the BIS Audit Committee and the Consultative Council for the Americas.
Macklem on BOC'S Profile and Wikipedia
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About USD/CAD
THE 'LOONIE'
THE IMPORTANCE OF OIL FOR THE LOONIE
Canada is commonly known as a resource based economy being a large producer and supplier of oil. The leading export market for Canada is by far the United States making its currency particularly sensitive to US consumption data and economical health.
ASSETS THAT INFLUENCE USD/CAD THE MOST
- Commodities: as we already explained, oil is number one, but gold and natural gas are also to be taken into account by the traders.
- Currencies: JPY and EUR. Other important group of influent pairs includes: EUR/USD, GBP/USD, USD/JPY, AUD/USD, USD/CHF, an NZD/USD.
- Bonds: CSB (Canada Savings Bonds), CPB (Canada Premium Bond).
- Indices: S&P/TSX Capped Composite Index (the headline index for the Canadian equity market), S&P/TSX Global Gold Index (index of global gold securities) and S&P/TSX Capped Energy Index (benchmarks for related derivative products of Canadian economic sectors).