Canadian Dollar tests fresh multi-month highs to kickstart June markets

The Canadian Dollar briefly tested a fresh six-month high against the Greenback on Monday.
June market trading kicked off with a fresh bout of US selling pressure as tariff concerns weigh on US sentiment.
The BoC’s latest rate call, slated for this week, is expected to see a hold on rates for now.

Joshua Gibson FXStreet

The Canadian Dollar (CAD) caught a fresh bid against the US Dollar (USD), with June’s market window kicking things off with a fresh six-month peak in intraday Loonie bids against the Greenback. The Trump administration has hit high gear on tariff moves, sparking a fresh round of risk aversion that is keeping the US Dollar under pressure.

The Bank of Canada’s (BoC) latest rate call is slated for Wednesday. The BoC is broadly expected to slow down its frenzied pace of rate cutting, with policymakers expected to hold off on further rate trims in June. On the US side, the Trump administration has imposed an arbitrary deadline of this Wednesday for trading partners to deliver their best deals to Trump’s desk, or risk facing April’s “reciprocal tariffs” getting re-imposed in July.

Daily digest market movers: Ongoing trade tensions give the Canadian Dollar a fresh leg up

The Canadian Dollar saw its highest close against the US Dollar in six months, keeping the USD/CAD pair trapped near 1.3700.
The ongoing legal battle over Trump’s tariffs has deepened, after the US Court of International Trade petitioned the federal appeals court to strike down Trump’s sweeping tariffs until Trump’s appeal of the USCIT ruling is finished.
The Trump administration, facing obstacles from the courts, has kicked tariff action into high gear.
Trump has announced a doubling of tariffs on all imports of steel into the US, pushing the import tax from 25% to 50%. The US is an aggregate importer of steel, and will likely be forced to pay higher prices across the board as US industry has no alternatives but to face increased import costs head on.
The Trump administration is reportedly preparing to tell trading partners that they have until Wednesday to deliver their best trade deal offer to the Trump team. With no concrete trade deals on the table, this is unlikely to produce meaningful results.

Canadian Dollar price forecast

The Canadian Dollar briefly tested fresh six-month lows on Monday, kicking off the June trading month on a high note. However, a near-term floor supporting the Greenback remains in place, keeping USD/CAD bolstered on the high side of 1.3700 for the time being. Still, the Canadian Dollar eked out its highest close against the US Dollar since last October, and USD/CAD is poised for a continued push to the low end.

USD/CAD daily chart

Canadian Dollar FAQs

What key factors drive the Canadian Dollar?

The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar.

How do the decisions of the Bank of Canada impact the Canadian Dollar?

The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive.

How does the price of Oil impact the Canadian Dollar?

The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD.

How does inflation data impact the value of the Canadian Dollar?

While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar.

How does economic data influence the value of the Canadian Dollar?

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. A strong economy is good for the Canadian Dollar. 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. If economic data is weak, however, the CAD is likely to fall.

Author

Joshua Gibson

FXStreet

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

Editor's Picks

EUR/USD gathers recovery momentum, trades near 1.1750

Following the correction seen in the second half of the previous week, EUR/USD gathers bullish momentum and trades in positive territory near 1.1750. The US Dollar (USD) struggles to attract buyers and supports the pair as investors await Tuesday's GDP data ahead of the Christmas holiday.

GBP/USD knocks ten-week highs ahead of holiday slowdown

GBP/USD found room on the high side on Monday, kicking off a holiday-shortened trading week with a fresh spat of Greenback weakness, bolstering the Pound Sterling into its highest bids in ten weeks. Pound traders are largely brushing off the latest interest rate cut from the Bank of England as the UK’s central bank policy strategy leaves the water murky for rate-cut watchers.

Gold buying remains unabated; fresh all-time peak and counting

Gold builds on the previous day's blowout rally through the $4,400 mark and continues scaling new record highs through the Asian session on Tuesday. Bets for more interest rate cuts by the US Fed, renewed US Dollar selling bias, and rising geopolitical uncertainties turn out to be key factors driving flows towards the bullion. Traders now look to the delayed release of the revised US Q3 GDP print and US Durable Goods Orders for a fresh impetus.

Year ahead 2026: Where will Bitcoin be in a year’s time?

Bitcoin, which accounts for roughly 60% of total crypto market capitalization, entered 2025 with unstoppable momentum under a crypto‑friendly Trump administration. The rally was supported by major regulatory wins and accelerating institutional adoption.

Ten questions that matter going into 2026

2026 may be less about a neat “base case” and more about a regime shift—the market can reprice what matters most (growth, inflation, fiscal, geopolitics, concentration). The biggest trap is false comfort: the same trades can look defensive… right up until they become crowded.

XRP steadies above $1.90 support as fund inflows and retail demand rise

Ripple (XRP) is stable above support at $1.90 at the time of writing on Monday, after several attempts to break above the $2.00 hurdle failed to materialize last week. Meanwhile, institutional interest in the cross-border remittance token has remained steady.