Canadian Dollar: Scope seen for recovery against US Dollar – TD Securities

FXStreet Insights Team FXStreet

TD Securities strategists argue that recent improvements in Canadian growth data justify a more constructive view on the Canadian Dollar (CAD). They see scope for USD/CAD to move lower from stretched post-FOMC levels, and have implemented a 2‑month 1.4050/1.39 put spread structure to express the view that the pair can eventually trade below 1.40.

Data-driven retrace case

"On the CAD side, the market has become too pessimistic with Canada's growth outlook again, despite improvement for Canadian data in recent weeks."

"Improving Canadian data should allow USD/CAD to eventually retrace below 1.40, and we expressed the view via a 2m 1.4050/1.39 put spread."

"The post-FOMC rally looks stretched in the CAD, with spot last sustaining levels above 1.42 only when broad-based tariff risks were elevated around last year’s “Liberation Day”— a scenario that appears unlikely to repeat this year."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

AUD/USD sits at two-month lows near 0.6950 after Australian CPI data

AUD/USD is sitting at two-month lows near 0.6950 in the Asian session on Wednesday, as below-expectations August Australian underlying CPI data pours cold water on expectations for further RBA interest rate hikes. Chinese PMI data also fail to inspire the Australian Dollar, despite a pause in the US Dollar advance.

USD/JPY stays weak below 157.00 amid Japanese intervention risks

USD/JPY keeps losses below 157.00 in the Asian session on Wednesday, as hawkish BoJ expectations, along with intervention risks, underpin the Japanese Yen, countering dismal domestic factory output and retail sales data. Meanwhile, a broad US Dollar retreat also collaborates to the pair's downside.

Gold meets resistance just above $4,200

Gold now makes a U-turn and recedes toward the $4,150 region per troy ounce on Wednesday. Indeed, the precious metal fades the earlier move past the key $4,200 yardstick and retreats marginally as the US Dollar trims part of its daily losses amid mixed US Treasury yields.

Crypto Today: Bitcoin holds $83K as Ethereum remains below $2,700 and XRP consolidates

Bitcoin trades lethargically on Wednesday, with bulls battling to defend the immediate $83,000 level as immediate support. Ethereum trades in tandem with Bitcoin, holding below key levels of $2,700 on the upside and $2,600 on the downside. Ripple, meanwhile, hovers near $1.50,

The Euro is near a one-year low: Inflation could trigger its rebound, not its fall

EUR/USD has fallen to its lowest level since May 2025, but a fresh inflation shock in the Eurozone could give the Euro an unexpected lifeline. The pair hit 1.1312 on Wednesday and trades well below the January peak of 1.2082. The decline reflects a powerful combination of US Dollar strength, geopolitical uncertainty and renewed concerns about Europe's exposure to higher energy prices.

The Euro is near a one-year low: Inflation could trigger its rebound, not its fall

EUR/USD has fallen to its lowest level since May 2025, but a fresh inflation shock in the Eurozone could give the Euro (EUR) an unexpected lifeline. The pair hit 1.1312 on Wednesday and trades well below the January peak of 1.2082.