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USD/CAD slide to 1.3530, lowest since October 2024 amid bullish Oil prices and weak USD

  • USD/CAD drifts lower for the third straight day on Thursday and is pressured by a combination of factors.
  • Crude Oil prices climb to a four-month top and underpin the Loonie amid the BoC’s neutral policy stance.
  • The uncertainty over Trump's decisions, Fed independence concerns, and rate-cut bets weigh on the USD.

The USD/CAD pair attracts some follow-through sellers for the third consecutive day and drops to its lowest level since October 2024 during the Asian session on Thursday. Spot prices currently trade around the 1.3540-1.3535 region, down 0.15% for the day, and seem vulnerable to decline further amid a combination of factors.

Crude Oil prices rise to a four-month high due to rising geopolitical risks and continued Chinese buying. Furthermore, a surprise decline in US inventories offsets concerns about oversupply and remains supportive of elevated prices. This, in turn, underpins the commodity-linked Loonie, which, along with a bearish US Dollar (USD), continues to exert downward pressure on the USD/CAD pair and validates the near-term negative outlook.

The USD Index, which tracks the Greenback against a basket of currencies, remains well within striking distance of a four-year low amid heightened economic and policy risk linked to US President Donald Trump's decisions. Apart from this, bets that the US Federal Reserve (Fed) will lower borrowing costs during the latter half of 2026 and the underlying bullish sentiment weigh on the safe-haven buck, contributing to the USD/CAD pair's slide.

As was widely expected, the US central bank left its key policy rate unchanged at the end of a two-day meeting on Wednesday. In the post-meeting press conference, Fed Chair Jerome Powell said that the incoming data had shown a clear improvement in the economic outlook. Traders, however, are still pricing in two more interest rate cuts by the Fed in 2026. Moreover, concerns about the Fed's independence keep the USD bulls on the defensive.

Meanwhile, the Bank of Canada (BoC) said that elevated levels of economic and geopolitical uncertainty were behind its decision to hold interest rates for the second time on Wednesday. The BoC added further that the uncertainty is bleeding into economic predictions, which now run from cuts to hikes to holds for 2026. The outlook, however, does little to influence the Canadian Dollar (CAD), leaving the USD/CAD pair at the mercy of the USD.

Traders now look to the release of the usual Weekly Initial Jobless Claims data from the US, which could influence the USD demand. Apart from this, Oil price dynamics might contribute to producing short-term trading opportunities around the USD/CAD pair. Nevertheless, the aforementioned fundamental backdrop remains tilted in favor of bearish traders and suggests that the path of least resistance for spot prices is to the downside.

US Dollar Price Last 7 Days

The table below shows the percentage change of US Dollar (USD) against listed major currencies last 7 days. US Dollar was the strongest against the Canadian Dollar.

USDEURGBPJPYCADAUDNZDCHF
USD-2.41%-2.87%-3.41%-2.11%-3.91%-3.54%-3.76%
EUR2.41%-0.47%-1.01%0.30%-1.54%-1.16%-1.39%
GBP2.87%0.47%-0.53%0.78%-1.07%-0.68%-0.92%
JPY3.41%1.01%0.53%1.31%-0.54%-0.18%-0.40%
CAD2.11%-0.30%-0.78%-1.31%-1.83%-1.46%-1.69%
AUD3.91%1.54%1.07%0.54%1.83%0.39%0.15%
NZD3.54%1.16%0.68%0.18%1.46%-0.39%-0.24%
CHF3.76%1.39%0.92%0.40%1.69%-0.15%0.24%

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 US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

Author

Haresh Menghani

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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