Created
: 2025.07.07
- 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 sticks to modest gains above 1.3900 amid sliding Oil prices, USD uptick
World FX news
Breaking news
USD/CAD sticks to modest gains above 1.3900 amid sliding Oil prices, USD uptick
2025.07.07 12:20
2025.07.07 12:20
- USD/CAD attracts some buyers amid a combination of factors, though it lacks bullish conviction.
- Sliding Crude Oil prices undermine the Loonie and support the major amid a modest USD uptick.
- Divergent Fed-BoC policy expectations could act as a headwind for the pair and warrant caution.
The USD/CAD pair trades with a positive bias for the second straight day on Monday and climbs to the 1.3920-1.3925 area during the Asian session. The uptick is sponsored by a combination of factors, though the lack of follow-through buying warrants caution for aggressive bullish traders.
Crude Oil prices kick off the new week on a weaker note in reaction to the OPEC+ surprise decision on Saturday to raise output by 548,000 barrels per day in August. This raises concerns about oversupply and weighs on the black liquid, which, in turn, is seen undermining the commodity-linked Loonie. The US Dollar (USD), on the other hand, attracts some safe-haven flow on the back of fresh Israeli strikes on Yemen in almost a month and turns out to be another factor acting as a tailwind for the USD/CAD pair.
Any meaningful USD appreciation, however, seems elusive in the wake of worries that US President Donald Trump's massive tax-cut and spending bill would worsen America's long-term debt problems. This, along with bets that the Federal Reserve (Fed) will resume its rate-cutting cycle in the near future, should keep a lid on the USD. Apart from this, diminishing odds for more interest rate cuts by the Bank of Canada (BoC) should benefit the Canadian Dollar (CAD) and contribute to capping the USD/CAD pair.
Moving ahead, there isn't any relevant market-moving economic data due for release on Monday, either from the US or Canada, leaving spot prices at the mercy of the USD and Crude Oil price dynamics. Meanwhile, the market focus will remain glued to the release of FOMC meeting minutes on Wednesday. Investors will look for fresh cues about the Fed's rate-cut path, which, in turn, will play a key role in influencing the USD demand and providing some meaningful impetus to the USD/CAD pair.
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
: 2025.07.07
Related articles
USD/CAD struggles near 1.3750 due to improved Oil prices
2025.08.04 12:13WTI tumbles to below $66.50 after OPEC+ agrees to another bumper output boost
2025.08.04 10:18OPEC+ agrees to boost oil production by 548K bpd for September, as expected
2025.08.04 08:14WTI retreats from $70 peak, tests key support as geopolitical tensions escalate
2025.08.02 04:15Limited options for replacing Russian Oil - Commerzbank
2025.08.01 21:14Indian refineries under pressure for buying Russian oil - Commerzbank
2025.08.01 20:14
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
Crude Oil price today: WTI price bullish at European opening
West Texas Intermediate (WTI) Oil price advances on Monday, early in the European session. WTI trades at $66.70 per barrel, up from Friday's close at $66.64.
New
2025.08.04 15:04Forex Today: US Dollar struggles to rebound as NFP data revive September rate cut bets
Here is what you need to know on Monday, August 4:
New
2025.08.04 15:03FX option expiries for Aug 4 NY cut
FX option expiries for Aug 4 NY cut at 10:00 Eastern Time via DTCC can be found below.
New
2025.08.04 14:47AUD/JPY recovers further from multi-week low, climbs to 95.80 amid a broadly weaker JPY
The AUD/JPY cross attracts some buyers during the Asian session on Monday and reverses a part of Friday's slump to the 95.00 neighborhood, or a nearly four-week low. Spot prices climb to a fresh daily peak, around the 95.80 region in the last hour, and draw support from a combination of factors.
New
2025.08.04 14:42EUR/USD holds onto gains below 1.1600 as US Dollar trades cautiously
The EUR/USD pair clings to Friday's gains near 1.1570 during the late Asian session on Monday. The major currency pair trades firmly as the US Dollar (USD) has been pushed to the backfoot, following questions over the credibility of the United States (US) data agencies.
New
2025.08.04 14:18GBP/USD Price Forecast: Resistance appears at 1.3300 near nine-day EMA
The GBP/USD pair moves sideways after registering more than 0.5% gains in the previous day, trading around 1.3280 during the Asian hours on Monday. The bearish bias prevails as the daily chart's technical analysis suggests that the pair moves downwards within the descending channel pattern.
New
2025.08.04 14:15USD/CHF Price Forecast: Keep a bearish vibe, crucial support level emerges near 0.8000
The USD/CHF pair attracts some buyers to around 0.8050 during the early European session on Monday, bolstered by a firmer US Dollar (USD).
New
2025.08.04 14:12Gold price edges lower amid modest USD uptick; September Fed rate cut bets limit losses
Gold price (XAU/USD) pulls back from the $3,369 region, or over a one-week top touched during the Asian session on Monday, and for now, seems to have stalled last week's goodish recovery move from a one-month low.
New
2025.08.04 13:58USD/INR recovers as Indian Rupee weakens ahead of RBI policy
The Indian Rupee (INR) resumes its downside journey against the US Dollar (USD) at the start of the week.
New
2025.08.04 13:43India Gold price today: Gold steadies, according to FXStreet data
Gold prices remained broadly unchanged in India on Monday, according to data compiled by FXStreet.
New
2025.08.04 13:36Disclaimer:
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
