Select Language

USD/CAD Price Forecast: More downside towards 1.3600 looks likely

Breaking news

USD/CAD Price Forecast: More downside towards 1.3600 looks likely

  • X
  • facebook
  • LINE
  • RSS

  • X
  • facebook
  • LINE
  • RSS
update 2025.06.05 13:23
USD/CAD Price Forecast: More downside towards 1.3600 looks likely

update 2025.06.05 13:23

  • USD/CAD trades vulnerably near 1.3650 as the US Dollar sees more downside on disappointing an array of US economic data.
  • US-China trade uncertainty also keeps the USD on the backfoot.
  • The BoC kept interest rates steady at 2.75% on Wednesday, as expected.

The USD/CAD pair appears vulnerable near an over eight-month low, slightly above 1.3650 during Asian trading hours on Thursday. The Loonie pair stays under pressure as the US Dollar (USD) remains on backfoot amid renewed United States (US) stagflation risks and trade uncertainty.

The US Dollar Index (DXY), which tracks the Greenback's value against six major currencies, trades cautiously near the six-week low around 98.60.

On Thursday, disappointing private sector employment and ISM Services Purchasing Managers' index (PMI) data for May exhibited softening labor demand, declining service sector activity, and rising input costs, a scenario that typically pushes the economy into a stagflation.

Meanwhile, trade uncertainty between the US and China has escalated after President Donald Trump signaled in a post on Truth.Social that negotiations with XI Jinping are a hard nut to crack.

In the Canadian economy, the Bank of Canada's (BoC) decision to hold interest rates steady at 2.75% and its discouraging comments on any near-term monetary policy adjustments have strengthened the Canadian Dollar (CAD). The BoC left its key borrowing rates steady at 2.75% on Wednesday, as expected.

Canadian Dollar PRICE Today

The table below shows the percentage change of Canadian Dollar (CAD) against listed major currencies today. Canadian Dollar was the strongest against the Japanese Yen.

USD EUR GBP JPY CAD AUD NZD CHF
USD 0.06% 0.06% 0.14% -0.00% 0.01% 0.05% 0.06%
EUR -0.06% 0.05% 0.10% -0.03% -0.04% -0.07% 0.03%
GBP -0.06% -0.05% 0.08% -0.09% -0.07% -0.13% -0.03%
JPY -0.14% -0.10% -0.08% -0.15% -0.18% -0.19% -0.08%
CAD 0.00% 0.03% 0.09% 0.15% -0.02% -0.04% 0.06%
AUD -0.01% 0.04% 0.07% 0.18% 0.02% -0.06% 0.05%
NZD -0.05% 0.07% 0.13% 0.19% 0.04% 0.06% 0.12%
CHF -0.06% -0.03% 0.03% 0.08% -0.06% -0.05% -0.12%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Canadian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent CAD (base)/USD (quote).

USD/CAD has retraced over 78.6% of the swing plotted from the late September low around 1.3400 to the early February high near 1.4800. Typically, a retracement over 61.8% accelerates the downside move to the end of the swing.

Declining 20-day Exponential Moving Average (EMA) near 1.3800 reflects that the near-term trend is bearish.

The 14-day Relative Strength Index (RSI) slides to near 33.00, indicating a strong bearish momentum.

More downside in the pair looks likely below Wednesday's low of 1.3650, which would drag it towards the round level of 1.3600 and the psychological figure of 1.3500.

In an alternate scenario, a recovery move above the May 29 high of 1.3820 would turn the near-term trend bullish and open the door towards the May 21 high of 1.3920, followed by the May 15 high of 1.4000.

USD/CAD daily chart

US Dollar FAQs

The US Dollar (USD) is the official currency of the United States of America, and the 'de facto' currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world's reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.

The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed's 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.

In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed's weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.

Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.


Date

Created

 : 2025.06.05

Update

Last updated

 : 2025.06.05

Related articles


Show more

FXStreet

Financial media

arrow
FXStreet

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

GBP/USD dips from 1.3770 high as US PCE, sentiment data lift Dollar

The GBP/USD retreats by over 0.10% after hitting a near four-year high of 1.3770 on Thursday, dipping to 1.3700 as the US Dollar recovers some ground following the release of the US Core Personal Consumption Expenditures (PCE) Price Index for May.
New
update2025.06.28 00:39

EUR/JPY rally continues as market eyes break above 170.00

The Euro (EUR) strengthens against the Japanese Yen (JPY) on Friday, with the EUR/JPY pair climbing toward levels not seen since July 2024.
New
update2025.06.27 23:54

Dollar Index remains weak as core PCE inflation rises, Personal spending fall

The US Dollar Index (DXY) is nearing 97.00 support as investors digest the latest batch of inflation data released out of the United States.
New
update2025.06.27 22:56

NZD/USD extends winning streak, nearing fresh year-to-date highs

The New Zealand Dollar (NZD) extends its winning streak against the US Dollar (USD) for the fifth straight session on Friday, buoyed by broad-based Greenback weakness.
New
update2025.06.27 22:04

Gold suffers another setback following a US-China trade truce, ahead of PCE inflation report

Gold (XAU/USD) is suffering another setback after reports telling that China and the United States have reached a trade deal.
New
update2025.06.27 21:19

Fed's Kashkari: The Fed might cut rates twice this year

The President of the Federal Reserve Bank of Minneapolis, Neel Kashkari, noted that he was sticking to his view that cooling inflation would allow the Fed to cut its policy rate twice that year, beginning in September.
New
update2025.06.27 21:17

Platinum continues to catch up with Gold - Commerzbank

There's no stopping the price of Platinum: Yesterday, it climbed above the $1,400 per troy ounce mark for the first time since September 2014, Commerzbank's Head of FX and Commodity Research Thu Lan Nguyen and commodity analyst Barbara Lambrecht note.
New
update2025.06.27 21:10

JPY flat vs. USD and lagging G4 peers EUR and GBP - Scotiabank

The Japanese Yen (JPY) is soft, down marginally against the US Dollar (USD) and trading around the midpoint of its range since early April, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.
New
update2025.06.27 21:05

Central banks intend to buy more Gold - Commerzbank

Gold remains in high demand among central banks. According to a survey published a few days ago by the Official Monetary and Financial Institutions Forum (OMFIF), a third of the 75 central banks surveyed plan to buy Gold in the next 1-2 years, Commerzbank's commodity analyst Carsten Fritsch notes.
New
update2025.06.27 21:03

GBP is trading unchanged near high - Scotiabank

Pound Sterling (GBP) is also quietly consolidating its latest push to a fresh multi-year high, trading just below Thursday's local top in the upper 1.37s, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.
New
update2025.06.27 21:01

Disclaimer:arw

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.

  • Facebook
  • Twitter
  • LINE

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

I agree
share
Share
Cancel