USD/CAD Forecast and News
USD/CAD extends downside to near 1.4300, all eyes on the US NFP release
The USD/CAD pair extends the decline to near 1.4300 during the late American session on Thursday. The weakening of the US Dollar is fuelled by concerns over the US economy and some renewed hopes that US President Donald Trump could delay some planned tariffs.
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EUR/USD churns as markets hunker down ahead of Friday NFP print
EUR/USD tried to stretch for a fourth straight day of gains, but markets are drawing into the middle ahead of Friday’s key US Nonfarm Payrolls print. The Euro saw a sharp rejection from the 1.0850 level on Thursday, ending Fiber’s three-day win streak.
GBP/USD snaps winning streak as Cable markets take a breather
GBP/USD faltered on Thursday, ending a stellar three-day run that saw the Pound Sterling gain 2.57% bottom-to-top against the Greenback from the start of the week.
USD/JPY seems vulnerable amid divergent Fed-BoJ expectations; US NFP awaited
USD/JPY languishes near its lowest level since October touched on Thursday amid a bearish USD, led by bets that the Fed could cut rates multiple times in 2025 amid slowing US economic growth. Moreover, the hawkish sentiment surrounding the BoJ's policy outlook underpins the JPY and validates the negative bias for the pair.
Gold price remains depressed ahead of US NFP; trade jitters to limit losses
Gold price trades with negative bias for the second straight day, though a combination of factors continues to act as a tailwind ahead of the crucial US NFP report later this Friday. Rising trade tensions continue to weigh on investors' sentiment.
WTI remains on the defensive near $66.00 amid tariff uncertainty
West Texas Intermediate is trading around $66.00 during the early Asian session on Friday. The WTI price remains on the defensive near a three-year low as traders are concerned about the impact of tariffs between the US, Canada, and China and plans by OPEC+ to raise output.
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USD/CAD YEARLY FORECAST
How could USD/CAD move this year? Our experts make a USD/CAD update forecasting the possible moves of the Canadian dollar (CAD) - US dollar (USD) pair during the whole year. Don't miss our 2025 USD/CAD forecast!
USD/CAD FORECAST 2025
The BoC is likewise set to continue easing interest rates through 2025, at least at a faster pace than the Fed is expected to, which will apply pressure on CAD’s already-rising rate differential. The BoC is under significant pressure to continue lowering interest rates. The Canadian Dollar is poised to continue falling in the first quarter. However, CAD investors will be looking to reassess the state of play between the Fed and the BoC heading into the middle quarters of the year. Read more details about the forecast.
2025 OUTLOOK FOR USD/CAD
Canadian Prime Minister Justin Trudeau is having difficulty keeping his government on an even keel. Political turmoil at both home and abroad will threaten the Canadian Dollar heading into 2025.
With the CAD testing multi-year lows and sending the Dollar into the attic, momentum traders will be looking hungrily to collect into bullish CAD positions to force a downside correction with USD/CAD price action testing into overbought territory.
ORGANIZATIONS, PEOPLE AND ECONOMIC DATA THAT INFLUENCE USD/CAD
In Canada, the organizations and people that affect the most the moves of the pair are:
- Bank of Canada (BoC, Canada’s Central bank) that issues statements and decides on the interest rates of the country. Its president is Tiff Macklem.
- Canadian Government and its Department of Finance that implement policies that affect the economy of the country.
- CAPP (Canadian Association of Petroleum Producers): Canada being a prominent oil and natural gas producer, the trade organization of that industry is very important.
In the USA, we have:
- The US Government: events as administration statements, new laws and regulations or fiscal policy can increase or decrease the value of the US Dollar and the currencies traded against it, in this case, the Canadian Dollar.
- Fed, the Federal Reserve of the United States whose president is Jerome Powell. The Fed controls the monetary policy, through active duties such as managing interest rates, setting the reserve requirement, and acting as a lender of last resort to the banking sector during times of bank insolvency or financial crisis.
In terms of economic data, we should highlight the Trade Account Balance, a balance between exports and imports of total goods and services. A positive value shows trade surplus, while a negative value shows trade deficit. It is an event that generates some volatility for the USD/CAD. If a steady demand in exchange for CAD exports is seen, that would turn into a positive growth in the trade balance, and that should be positive for the CAD.
Inflation is another economic value that is important for this pair. It is measured among others by the CPI (Core Price Index) and the PPI (Production Price Index). They are key indicators to measure inflation and changes in purchasing trends.
Jerome Powell
Jerome Powell took office as chairman of the Board of Governors of the Federal Reserve System in February 2018, for a four-year term ending in February 2022. His term as a member of the Board of Governors will expire January 31, 2028. Born in Washington D.C., he received a bachelor’s degree in politics from Princeton University in 1975 and earned a law degree from Georgetown University in 1979. Powell served as an assistant secretary and as undersecretary of the Treasury under President George H.W. Bush. He also worked as a lawyer and investment banker in New York City. From 1997 through 2005, Powell was a partner at The Carlyle Group.
Jerome Powell Fed's Profile and Wikipedia
Tiff Macklem
Tiff Macklem was born in Montréal, Quebec, in 1961. He was appointed Governor of the Bank of Canada, effective 3 June 2020, for a seven-year term. He is the tenth governor of the Bank of Canada. As Governor, he is also Chairman of the Board of Directors of the Bank for International Settlements (BIS). He currently chairs both, the BIS Audit Committee and the Consultative Council for the Americas.
Macklem on BOC'S Profile and Wikipedia
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About USD/CAD
THE 'LOONIE'
THE IMPORTANCE OF OIL FOR THE LOONIE
Canada is commonly known as a resource based economy being a large producer and supplier of oil. The leading export market for Canada is by far the United States making its currency particularly sensitive to US consumption data and economical health.
ASSETS THAT INFLUENCE USD/CAD THE MOST
- Commodities: as we already explained, oil is number one, but gold and natural gas are also to be taken into account by the traders.
- Currencies: JPY and EUR. Other important group of influent pairs includes: EUR/USD, GBP/USD, USD/JPY, AUD/USD, USD/CHF, an NZD/USD.
- Bonds: CSB (Canada Savings Bonds), CPB (Canada Premium Bond).
- Indices: S&P/TSX Capped Composite Index (the headline index for the Canadian equity market), S&P/TSX Global Gold Index (index of global gold securities) and S&P/TSX Capped Energy Index (benchmarks for related derivative products of Canadian economic sectors).