|

Canadian Dollar struggles as stronger PMIs support US Dollar

  • USD/CAD trades around 1.4095 on Friday, up a modest 0.06% at the time of writing.
  • July US PMI data points to stronger business activity, supporting the US Dollar.
  • Canadian producer and raw material prices decline sharply, while lower Oil prices continue to weigh on the Canadian Dollar.

USD/CAD trades around 1.4095 on Friday at the time of writing, up a modest 0.06% as the US Dollar (USD) retains a slight advantage following the release of solid US economic data, while the Canadian Dollar (CAD) remains pressured by weak domestic indicators and softer Oil prices.

The United States (US) S&P Global Composite Purchasing Managers Index (PMI) rose to 53.6 in July from 51.9 in June, signaling an acceleration in private sector activity. The Services PMI improved to 53.6, while the Manufacturing PMI eased slightly to 53.8 from 53.9. According to Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, the survey is consistent with annualized Gross Domestic Product (GDP) growth of around 2% in the third quarter, although supply chain disruptions and price pressures continue to intensify.

The stronger-than-expected data highlights the resilience of the US economy and helps support the US Dollar, although the immediate market reaction remains limited. Investors are now focused on next week's Federal Reserve (Fed) policy meeting for further guidance on the monetary policy outlook.

In Canada, Friday's data pointed to renewed weakness in producer prices. The Industrial Product Price Index fell 1.4% MoM in June after a revised 1.4% increase in May, while the Raw Material Price Index dropped 6.9%, well below market expectations. These figures add to the recent softer inflation data, reinforcing expectations that the Bank of Canada (BoC) could maintain a more accommodative policy stance than the Fed.

Meanwhile, lower Oil prices continue to cap support for the Canadian Dollar. The weakness in the energy market, combined with diverging monetary policy expectations between the Bank of Canada (BoC) and the Federal Reserve (Fed), as well as uncertainty surrounding the Trump administration's new tariffs, continues to provide a mildly supportive backdrop for USD/CAD in the near term.

CAD steadies as modestly better fundamentals offset trade tension overhang

Strategists at Scotiabank observe that the Canadian Dollar is essentially unchanged on the day, noting that “the CAD is all but flat on the session.” They judge the backdrop to be “a little more positive for the CAD in late week trading as US yields edge off their highs and front-end spreads narrow,” but caution that sentiment remains fragile. In their view, “the CAD may still struggle to gain support as trade tensions linger,” with PM Carney signalling that Canada is “weighing all options for possible retaliation if there is no agreement to avoid 50% tariffs next month.” From a technical standpoint, Scotiabank maintains a “neutral—there is still no real change in the CAD’s technical condition” stance, highlighting that “spot is pivoting around the 40-day MA (which has nudged up to 1.4081 this morning) and it remains well below USD resistance at 1.4125 and above initial support at 1.4060.”

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.

USDEURGBPJPYCADAUDNZDCHF
USD-0.03%-0.10%-0.03%0.04%-0.20%-0.26%0.13%
EUR0.03%-0.11%-0.04%0.02%-0.24%-0.31%0.10%
GBP0.10%0.11%0.09%0.14%-0.11%-0.17%0.21%
JPY0.03%0.04%-0.09%0.09%-0.18%-0.23%0.14%
CAD-0.04%-0.02%-0.14%-0.09%-0.26%-0.33%0.06%
AUD0.20%0.24%0.11%0.18%0.26%-0.06%0.32%
NZD0.26%0.31%0.17%0.23%0.33%0.06%0.38%
CHF-0.13%-0.10%-0.21%-0.14%-0.06%-0.32%-0.38%

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).

Author

Ghiles Guezout

Ghiles Guezout is a Market Analyst with a strong background in stock market investments, trading, and cryptocurrencies. He combines fundamental and technical analysis skills to identify market opportunities.

More from Ghiles Guezout
Share:

Editor's Picks

AUD/USD consolidates above 0.7000; remains close to monthly top

AUD/USD holds steady above 0.7000 during the Asian session on Friday, trading just below the previous day's monthly low amid diverging forces. A hawkish RBA continues to support the Aussie, while the recent decline in US bond yields keeps the US Dollar depressed near a three-week low. However, oil-driven inflation fears reinforce Fed hike bets, which, along with geopolitical risks, could benefit the safe-haven buck and cap the currency pair.

USD/JPY drops to an over one-month low, around 156.00 after Japan's CPI report

USD/JPY attracts heavy follow-through selling on Friday, dropping to the 156.00 neighborhood, a one-month low, as Japan's National CPI report reaffirms bets for an imminent BoJ rate hike and boosts the Japanese Yen. Moreover, the recent steep fall in US bond yields counters hawkish Fed expectations and geopolitical risks, undermining the US Dollar and exerting additional pressure on the currency pair.

Gold seems vulnerable near August lows; eyes $4,000 break amid Fed hike bets

Gold touches a fresh low since early August during the Asian session on Friday, eyeing the key $4,000 psychological mark. Oil-driven inflation fears reinforce December Fed hike bets and continue to undermine the non-yielding bullion, which fails to benefit from the recent steep fall in US bond yields and the prevailing US Dollar selling bias. Moreover, the overnight breakdown below a trading-range support backs the case for further depreciation.



Bitcoin falls 4% as chip stocks plunge 6.7% and oil surges
Bitcoin (BTC) fell below $82,000 on Thursday as the crypto market joined a broader market sell-off driven by concerns over artificial intelligence (AI) spending, rising oil prices and escalating geopolitical tensions involving the US and Iran. The top crypto fell 4% to $81,130 as macro fears weighed on prices across the digital asset market.
The Bank of England just got its clearest reason to hike. Here's what it's really watching

UK inflation as measured by the CPI accelerated to 3.5% YoY in September, up from 3.1% in August, according to the Office for National Statistics. This is the highest level since October 2025, exceeding economists' expectations of 3.4% and pushing inflation further from the BoE's 2% target.

What November 3 means for the Fed's rate path and the US Dollar

The USD faces a decisive period ahead of the November 3 midterm elections. While markets anticipate another interest rate increase from the Fed in December, the battle for control of Congress could reshape fiscal policy expectations and, indirectly, the path of US monetary policy in 2027.