Created
: 2025.06.18
- 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 strengthens to near 1.3700 amid geopolitical risks
World FX news
Breaking news
USD/CAD strengthens to near 1.3700 amid geopolitical risks
2025.06.18 08:03
2025.06.18 08:03
- USD/CAD gains ground to around 1.3690 in Wednesday's early Asian session.
- Fears of US involvement in the Israel-Iran conflict boost the safe-haven flows, supporting the US Dollar.
- US Retail Sales fell more than expected in May.
The USD/CAD pair trades in positive territory near 1.3690 during the early Asian session on Wednesday. The US Dollar (USD) attracts some buyers amid escalating geopolitical tensions between Israel and Iran. Investors will closely monitor the US Federal Reserve (Fed) interest rate decision later on Wednesday.
Israel is set to intensify its attacks on Tehran, while the United States (US) is considering expanding its role amid rising tensions between Israel and Iran. Following his early departure from the G-7 meeting in Canada on Tuesday, US President Donald Trump said that he wants a permanent end to Iran's route to nuclear weapons. The conflict has raised concerns about a wider impact on the global economy, which might boost the safe-haven currency like the Greenback in the near term.
On the other hand, the latest downbeat US economic data could exert some selling pressure on the USD. The US Census Bureau reported on Tuesday that US Retail Sales declined by 0.9% in May, compared to the 0.1% decrease (revised from +0.1%) seen in April. This reading came in worse than the market expectation for a contraction of 0.7%.
Additionally, extended gains in Crude Oil prices might lift the commodity-linked Loonie and create a headwind for the pair. It's worth noting that Canada is the largest oil exporter to the US, and higher crude oil prices tend to have a positive impact on the CAD value.
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
: 2025.06.18
Related articles
EUR/USD slides below 1.1700 as tariff fears lift Dollar to 2-week high
2025.07.12 07:26USD/CHF Price Forecast: Holds firm below 0.8000 on US Dollar demand
2025.07.12 05:44Fed's Goolsbee warns that new tariff threats could hamper rate cut hopes
2025.07.12 05:24Canadian Dollar tests low side despite upswing in Canadian labor data
2025.07.12 05:18AUD/USD stalls at key 0.6600 resistance amid mixed market catalysts
2025.07.12 04:15EUR/CHF Price Forecast: Bearish momentum grows within consolidation range
2025.07.12 03:24
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
EUR/USD slides below 1.1700 as tariff fears lift Dollar to 2-week high
EUR/USD finished the week with losses of over 0.70% and ended Friday's session down 0.10% trading below the 1.1700 figure, cementing the case for a pullback to test key support levels as the Greenback posts its best week in four months. At the time of writing, the pair trades at 1.1688.
New
2025.07.12 07:26Copper prices steady as refining constraints and tariff fears persist
Copper futures are trading near $5.50 per pound on Friday, slipping from Tuesday's high of $5.70 on the daily timeframe.
New
2025.07.12 06:29USD/CHF Price Forecast: Holds firm below 0.8000 on US Dollar demand
The USD/CHF consolidates during the North American session, is flat below the 0.8000 figure, poised to finish the week with 0.36% gains. A risk-off mood bolstered the Greenback, which so far has recovered some ground during the current week.
New
2025.07.12 05:44FHFA Director suggests that Fed Chair Powell may be considering resigning
Bill Pulte, the Trump-selected Director of the Federal Housing Finance Agency and former chairman of Fannie May and Freddie Mac, nodded to entirely-uncomfirmed reports that Federal Reserve (Fed) Chair Jerome Powell may be considering resigning from his post as the head of the Fed.
New
2025.07.12 05:37Fed's Goolsbee warns that new tariff threats could hamper rate cut hopes
In an interview with the Wall Street Journal, Federal Reserve (Fed) Bank of Chicago President Austan Goolsbee warned that ongoing trade policy at the hands of Trump's constant tariff threats could hamper the ability of the Fed to deliver interest rate cuts that both the broader market and Donald Tru
New
2025.07.12 05:24Canadian Dollar tests low side despite upswing in Canadian labor data
The Canadian Dollar (CAD) tested lower ground against the US Dollar (USD) on Friday, shedding weight despite Canadian labor data figures outperforming median market forecasts by a sizeable margin, kicking back economic downturn concerns and forcing rate watchers to trim their bets of another Bank of
New
2025.07.12 05:18AUD/USD stalls at key 0.6600 resistance amid mixed market catalysts
The battle between the Australian Dollar (AUD) and the US Dollar (USD) persists on Friday, with bulls in the AUD/USD pair continuing to push for a break through the next major resistance level at 0.6600.
New
2025.07.12 04:15Gold price surges past $3,350 as Trump tariff threats jolt markets
Gold price rallies nearly 1% on Friday as the market mood shifts sour on controversial trade policies imposed by US President Donald Trump on Canada and threatening to broaden duties to other countries and Copper.
New
2025.07.12 03:51Dow Jones Industrial Average backslides as trade war rhetoric accelerates again
The Dow Jones Industrial Average (DJIA) snapped a two-day recovery on Friday, testing below the 44,400 level once again as equities grapple with a new reality where trade tariffs exist in a quantum state, prone to popping in and out of existence at a moment's notice.
New
2025.07.12 03:34EUR/CHF Price Forecast: Bearish momentum grows within consolidation range
The Euro (EUR) remains under pressure against the Swiss Franc (CHF) on Thursday, trading near the lower boundary of its multi-week consolidation range between 0.9300 and 0.9430.
New
2025.07.12 03:24Disclaimer:
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
