USD/CAD holds key support of 1.3950 as US Dollar resumes upside


  • USD/CAD sustains above 1.3950 as the near-term outlook of the US Dollar remains firm.
  • US Initial Jobless Claims came in lower at 213K than estimates of 220K.
  • Traders have trimmed BoC outsize interest rate cut bets for the December meeting.

The USD/CAD pair ticks down but holds the immediate support of 1.3950 in Thursday’s North American session. The Loonie pair strives to resume its upside journey on the US Dollar’s (USD) firm near-term outlook backed by growing doubts over whether the Federal Reserve (Fed) will cut interest rates in the December meeting.

The Fed started its policy-easing cycle with a 50 basis points (bps) interest rate cut in September and took forward the process to this month with a 25 bps interest rate reduction. However, traders seem to be indecisive about the continuation of the rate-cut cycle for next month on expectations that the implementation of President-elect Donald Trump’s economic agenda will boost United States (US) inflation and economic growth.

The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, ticks down in the North American session to near 106.50 after the release of the Initial Jobless Claims data for the week ending November 15. The Greenback drops even though the Department of Labor reported that individuals claiming jobless benefits for the first time came in lower at 213K than estimates of 220K and the former release of 219K, upwardly revised from 217 K.

In the Canadian region, traders have reduced some bets supporting a second consecutive larger-than-usual interest rate cut of 50 basis points (bps) by the Bank of Canada (BoC) in the December meeting. Market speculation for the BoC 50 bps interest rate cut diminished slightly after the faster-than-expected growth in the Canadian Consumer Price Index (CPI) data for October. The CPI report showed that the headline inflation rose by 2%, faster than estimates of 1.9% and the former release of 1.6% on year.

For more cues about the likely interest rate action in the December meeting, investors will pay close attention to the monthly Canadian Retail Sales for September, which will be published on Friday. Economists expect Retail Sales to have grown steadily by 0.4%.

 

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

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.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Trading Pro
Read review
Pepperstone
Read review
Trading Pro
Read review
Pepperstone
Read review
Trading Pro
Read review
Pepperstone
Read review
XM
Read review
Moneta Markets
Read review
XM
Read review
Moneta Markets
Read review

Recommended content


Recommended content

Editors’ Picks

AUD/USD drifts lower toward 0.6300; looks to US NFP for fresh impetus

AUD/USD drifts lower toward 0.6300; looks to US NFP for fresh impetus

AUD/USD heads toward 0.6300 early Friday, resuming the pullback from near 0.6400. The pair remains on a slippery slope despite a weaker US Dollar. US-China trade tensions and increased odds of Trump's tariffs-led global recession undermine the risk-sensitive Aussie. All eyes on US NFP and Powell. 

AUD/USD News
USD/JPY holds recovery near 146.00; upside seems limited ahead of US NFP

USD/JPY holds recovery near 146.00; upside seems limited ahead of US NFP

USD/JPY trades close to 146.00, holding its recovery in the Asian session on Friday. Investors dial down bets of aggressive BoJ rate hikes, amid worries that Trump's new tariffs could negatively impact Japan's economy, helps the pair sustain its latest upswing. But buyers remain wary ahead of US NFP and Powell. 

USD/JPY News
Gold turns south toward $3,100, all eyes on US NFP and Powell

Gold turns south toward $3,100, all eyes on US NFP and Powell

Gold price returns to the red, eyeing $3,100 again in the Asian session on Friday after facing some profit-taking in the previous session. Escalating concerns over a global trade war and a US recession boost the Gold price, a traditional safe-haven asset. The focus now stays on the US NFP data and Powell's speech. 

Gold News
What to expect from Bitcoin and XRP following Trump tariffs: Experts weigh in

What to expect from Bitcoin and XRP following Trump tariffs: Experts weigh in

Bitcoin stretched its decline on Thursday, briefly dropping below $83,000 as President Trump's newly announced reciprocal tariffs extended the crypto market downturn by over 4%. The sustained decline and high volatility highlight Bitcoin's increasing risk to macroeconomic uncertainties. 

Read more
Trump’s “Liberation Day” tariffs on the way

Trump’s “Liberation Day” tariffs on the way

United States (US) President Donald Trump’s self-styled “Liberation Day” has finally arrived. After four straight failures to kick off Donald Trump’s “day one” tariffs that were supposed to be implemented when President Trump assumed office 72 days ago, Trump’s team is slated to finally unveil a sweeping, lopsided package of “reciprocal” tariffs. 

Read more
The Best brokers to trade EUR/USD

The Best brokers to trade EUR/USD

SPONSORED Discover the top brokers for trading EUR/USD in 2025. 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.

Read More

Forex MAJORS

Cryptocurrencies

Signatures

Best Brokers of 2025