Created
: 2025.03.06
- 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
USD/CAD gains to near 1.4360 despite US Dollar declines
World FX news
Breaking news
USD/CAD gains to near 1.4360 despite US Dollar declines
New
2025.03.06 20:35
2025.03.06 20:35
2025.03.06 20:35
- USD/CAD rises to near 1.4360 even though the US Dollar slides to four-month low.
- US President Trump is set to reprieve tariffs on automobiles from Canada and Mexico.
- Investors await the employment data for February from both the US and Canada.
The USD/CAD pair moves higher to near 1.4360 in Thursday's European session despite the US Dollar (USD) extends its downside, suggesting significant weakness in the Canadian Dollar (CAD). The US Dollar Index (DXY), which tracks the Greenback's value against six major currencies, slides to a four-month low near 104.00.
The Greenback faces selling pressure as investors expect the tariff agenda of United States (US) President Donald Trump won't be favorable for the economy in the near term. The impact of higher tariffs is expected to be borne by US importers, which will eventually passed on to end consumers. Such a scenario would reduce the purchasing power of households, resulting in a slowdown in the overall demand structure.
Meanwhile, the Canadian Dollar underperforms has President Trump imposed 25% tariffs on Canada and Mexico on March 4. However, the White House reported on Wednesday that tariffs have been reprieved from automobiles after consulting with three big carmakers.
Market participants expect Trump tariffs to impact Canadian economic growth significantly, knowing that Canada is one of the leading trading partners of the US.
Going forward, investors will focus on the US and Canada employment data for February, which will be released on Friday. The Canadian economy is expected to have added fewer new workers while the US economy is projected to have witnessed a strong labor demand.
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
: 2025.03.06
Related articles
EUR/JPY finds temporary support as ECB cuts Deposit Facility rate by 25 bps to 2.5%
2025.03.06 22:41US: Initial Jobless Claims dropped to 221K last week
2025.03.06 22:38GBP tags along with general FX trend - Scotiabank
2025.03.06 22:11CAD edges marginally lower - Scotiabank
2025.03.06 22:10USD prone to weakness as investors ponder 'US exceptionalism' - Scotiabank
2025.03.06 22:08EUR peaked above 1.08 ahead of ECB policy decision - Scotiabank
2025.03.06 22:06
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
Silver Price Forecast: XAG/USD corrects to near $32.40 as Trump reprieves tariffs on automobiles
Silver Price (XAG/USD) corrects from the weekly high of $32.70 and drops to near $32.40 in North American trading hours on Thursday.
New
2025.03.06 23:28EUR/JPY finds temporary support as ECB cuts Deposit Facility rate by 25 bps to 2.5%
The EUR/JPY pair finds temporary support after sliding more than 0.75% intraday to near 159.20 in Thursday's North American session.
New
2025.03.06 22:41US: Initial Jobless Claims dropped to 221K last week
US citizens filing new applications for unemployment insurance decreased to 221K for the week ending March 1, as reported by the US Department of Labor (DOL) on Thursday.
New
2025.03.06 22:38GBP tags along with general FX trend - Scotiabank
Pound Sterling (GBP) briefly nudged above 1.29 for the first time since November.
New
2025.03.06 22:11CAD edges marginally lower - Scotiabank
The Canadian Dollar (CAD) is marginally weaker. Canada got a further, temporary concession from the US border tariff regime yesterday, with the White House announcing a one-month reprieve for the auto sector, Scotiabank's Chief FX Strategist Shaun Osborne notes, Scotiabank's Chief FX Strategist Shaun Osborne notes.
New
2025.03.06 22:10USD prone to weakness as investors ponder 'US exceptionalism' - Scotiabank
The USD is mixed to weaker overall on the session amid a broader slump in market sentiment.
New
2025.03.06 22:08EUR peaked above 1.08 ahead of ECB policy decision - Scotiabank
The ECB policy decision this morning is less about the expected 25bps cut--it's fully priced in--than how the policy outlook is communicated, Scotiabank's Chief FX Strategist Shaun Osborne notes.
New
2025.03.06 22:06US Dollar undergoes seismic shift with DXY down 3% in worst week since 2022
The US Dollar Index (DXY), which tracks the performance of the US Dollar (USD) against six major currencies, is facing a pivotal change in its trading regime this week.
New
2025.03.06 21:38USD/CAD gains to near 1.4360 despite US Dollar declines
The USD/CAD pair moves higher to near 1.4360 in Thursday's European session despite the US Dollar (USD) extends its downside, suggesting significant weakness in the Canadian Dollar (CAD).
New
2025.03.06 20:34EUR/CHF: Domestic inflation continues to edge lower- Danske Bank
CHF was among the big losers yesterday with EUR/CHF rising 1.5% during yesterday's session, Danske Bank's FX analyst Kirstine Kundby-Nielsen reports.
New
2025.03.06 20:17Disclaimer:
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
