The Canadian dollar has appreciated significantly against the US dollar, reaching levels not seen in over a year. This strengthening is influenced by a combination of factors, including the Bank of Canada’s policy stance, modest growth projections for the Canadian economy, and notable weakness in the US dollar. Trade uncertainties and US tariffs continue to pose challenges to Canada’s economic outlook.
- The Canadian dollar strengthened towards 1.35 per US dollar, a sixteen-month high.
- The Bank of Canada projects modest GDP growth of approximately 1.1% in 2026 and 1.5% in 2027.
- Excess supply is expected to offset tariff-related cost pressures, keeping inflation near the 2% target.
- US dollar weakness, driven by President Trump’s comments and speculation over US-Japan coordination to support the yen, amplified the loonie’s move.
- USD/CAD fell to near 1.3550, registering a 15-month low.
- USD/CAD trades around 1.3570.
- Technical analysis indicates a bearish tone for USD/CAD, extending below key Exponential Moving Averages.
Overall, the information suggests a positive outlook for the Canadian dollar in the short term. The currency’s recent gains are supported by both domestic economic factors and external pressures on the US dollar. While trade-related challenges persist, the central bank’s projections and current market dynamics favor continued strength for the Canadian currency.