Created
: 2025.02.13
- English
- English
- What's Myforex
- Share
- Use tools
- Get information
- What's New
- Help center
- About us
- Customer support
- Terms and policies
-
-
PortfolioShare your portfolio and performance in real time -
Events & contestsEvents and contests held by retail brokers around the world
-
-
Real-time spread comparisonCompare spreads of major retail brokers in real time -
Volatility analysisVisualize volatility as a measure of daily market activity -
Swap point comparisonCompare buy and sell swap values for each broker by symbol -
Market rates & chartsCheck prices for all instruments offered by each broker -
IndicatorsProviding in-house developed indicators for MT4/MT5 -
Trading calculatorsCalculation tools for each broker to help you trade
-
-
World FX newsLatest news on forex and cryptocurrencies from around the world -
Broker informationTrading information of retail brokers worldwide -
MetaTrader4/5 user guideUser guide collection for the latest MetaTrader4/5 -
Economic calendarRelease calendar for indicators from official sources of major economies
Canadian Dollar recovery grinds away, Loonie finds fresh eight-week high
World FX news
Breaking news
Canadian Dollar recovery grinds away, Loonie finds fresh eight-week high
New
2025.02.13 04:20
2025.02.13 04:20
2025.02.13 04:20
- The Canadian Dollar eked out a new eight-week peak on Wednesday.
- Economic data out of Canada remains thin, Greenback market flows dominate.
- Investors are recovering from a fresh spark in US inflation figures.
The Canadian Dollar (CAD) briefly tested a new eight-week peak on Wednesday, pushing USD/CAD to its lowest levels since mid-December. The Greenback is softening across the board as investor sentiment recovers from a fresh spike of US inflation, which has punished out bets of a Fed rate cut to December.
The Bank of Canada's (BoC) latest Meeting Minutes showed the Canadian central bank remains leery of potential US tariffs, crimping the BoC's ability to engage in policy adjustment and forcing Canadian policymakers to sit on the sidelines to see what happens. The BoC is bracing to see if possible tariffs from the US could spark a fresh round of inflation within the Canadian economy.
Daily digest market movers: Canadian Dollar finds limited room on the high side
- The Canadian Dollar tested briefly into a new eight-week peak before receding to familiar territory.
- The BoC's latest Summary of Deliberations shows the BoC remains concerned about trade war fallout.
- US Consumer Price Index (CPI) inflation spiked in January, causing a ripple through global markets.
- Federal Reserve (Fed) Chair Jerome Powell continues to soothe markets, noting that US labor and Gross Domestic Product (GDP) growth remains firm.
- Despite a constant cycle of renewed tariff threats from US President Donald Trump, investors are banking on more concessions moving forward as the can gets kicked down the road by the Trump administration on its own tariff proposals.
Canadian Dollar price forecast
Despite some intraday jostling, the Canadian Dollar is broadly stuck in a familiar sideways grind. Price action continues to skid along the 50-day Exponential Moving Average (EMA) on the USD/CAD chart, waffling near 1.4300.
Despite the Loonie's recent dip into a multi-decade low, the pair remains hobbled within a medium-term congestion channel. Bids have continued to grind sideways since December, albeit with some spikes in volatility as news headlines dominate the trading cycle.
USD/CAD daily chart
Canadian Dollar FAQs
The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada's largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada's exports versus its imports. Other factors include market sentiment - whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) - with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar.
The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive.
The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada's biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD.
While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada's case is the Canadian Dollar.
Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.
Last updated
: 2025.02.13
Related articles
USD/JPY Price Forecast: Surges past 154.50 post hot CPI
44 minutes agoCanadian Dollar recovery grinds away, Loonie finds fresh eight-week high
2025.02.13 04:19Forex Today: Further US inflation gauges should rule the sentiment
2025.02.13 04:04BoC Meeting Minutes show Canadian policymakers are awaiting signs of tariff inflation
2025.02.13 03:48US Dollar turns down despite hot CPI
2025.02.13 03:38Mexican Peso defies US inflation shock, extends gains
2025.02.13 02:55
FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.
Was this article helpful?
We hope you find this article useful. Any comments or suggestions will be greatly appreciated.
We are also looking for writers with extensive experience in forex and crypto to join us.
please contact us at [email protected].
Thank you for your feedback.
Thank you for your feedback.
Most viewed
USD/JPY Price Forecast: Surges past 154.50 post hot CPI
The USD/JPY rallied sharply on Wednesday after a hot US inflation report spurred a jump in the US 10-year Treasury yield, closely correlated with the major.
New
2025.02.13 06:13Gold price steadies as Powell stands firm on restrictive policy
Gold price recovered some ground late during Wednesday's North American session.
New
2025.02.13 05:51Canadian Dollar recovery grinds away, Loonie finds fresh eight-week high
The Canadian Dollar (CAD) briefly tested a new eight-week peak on Wednesday, pushing USD/CAD to its lowest levels since mid-December.
New
2025.02.13 04:19Forex Today: Further US inflation gauges should rule the sentiment
The US Dollar succumbed to the late selling pressure and faded the post-CPI move to weekly highs, while investors kept digesting Powell's testimonies and sticky consumer prices in January.
New
2025.02.13 04:04BoC Meeting Minutes show Canadian policymakers are awaiting signs of tariff inflation
The Bank of Canada released its latest Meeting Minutes on Wednesday.
New
2025.02.13 03:48US Dollar turns down despite hot CPI
The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against a basket of currencies, initially climbed after January's hotter-than-expected Consumer Price Index (CPI) data but then reversed course.
New
2025.02.13 03:38Mexican Peso defies US inflation shock, extends gains
The Mexican Peso (MXN) extended its gains against the US Dollar (USD) for the second consecutive day, unfazed by the jump in inflation in the United States (US), preventing the Federal Reserve (Fed) from easing policy.
New
2025.02.13 02:55EUR/USD reverses early declines, climbs back over 1.04
EUR/USD clawed back chart paper on Wednesday, rebounding from early losses to reclaim the 1.0400 handle as markets shake off a fresh batch of US inflation figures that broadly accelerated in January.
New
2025.02.13 02:48Fed's Bostic: labor is good, but inflation still needs monitoring
Federal Reserve (Fed) Bank of Atlanta President added his own soundbites to the noise machine of Fed headlines on Wednesday, noting that despite still-strong labor figures, US inflation continues to remain a sticking point, especially after US Consumer Price Index (CPI) inflation figures ticked higher in January.
New
2025.02.13 02:33Dow Jones Industrial Average tumbles as US inflation kicks higher
The Dow Jones Industrial Average (DJIA) tumbled on Wednesday,dropping over 400 points at its lowest and dipping into 44090.
New
2025.02.13 02:06Disclaimer:
All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.
The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.
Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy
