The Canadian dollar is caught between competing forces, holding steady near 1.37 per US dollar. Support stems from rising crude prices driven by global supply constraints and a relatively firm domestic monetary policy stance with inflation remaining above the Bank of Canada’s target. However, potential trade risks, especially threats of tariffs from the US related to trade with China, are capping gains for the loonie. Technical analysis suggests a bearish trend for USD/CAD.
- The Canadian dollar steadied near 1.37 per US dollar.
- Crude prices are rising due to slowing Russian fuel oil exports, supply disruptions in the US, and reduced Venezuelan shipments to China.
- Canadian inflation at 2.4% remains above the Bank of Canada’s 2% target.
- Expectations are that the policy rate will remain at 2.25% for longer.
- President Trump threatened 100% tariffs on Canadian goods should Ottawa pursue a trade deal with China.
- USD/CAD is trading around 1.3570, extending below key Exponential Moving Averages.
- Technical analysis shows a bearish tone for USD/CAD.
The Canadian dollar’s performance is influenced by global commodity market dynamics, domestic inflation levels, and international trade relations. Increased oil prices and a stable domestic monetary policy provide upward pressure, while trade uncertainties introduce downward risks. The currency’s future trajectory depends on the interplay of these factors, and whether positive aspects can outweigh looming trade tensions.