Select Language

Canadian Dollar tumbles after fresh Greenback strength

Breaking news

Canadian Dollar tumbles after fresh Greenback strength

  • X
  • facebook
  • LINE
  • RSS

  • X
  • facebook
  • LINE
  • RSS
New update 2025.07.08 03:41
Canadian Dollar tumbles after fresh Greenback strength

update 2025.07.08 03:41

  • The Canadian Dollar took a tumble on Monday as markets bid up the US Dollar again.
  • A fresh push into the safe haven Greenback on trade fears has pulled the rug from beneath the Loonie.
  • Despite a fresh delay to widespread tariffs, Trump has threatened even more trade duties.

The Canadian Dollar (CAD) fell back on Monday, catching a fresh bout of risk aversion as investors stepped back into the safe haven US Dollar (USD). The Trump administration is poised to stiffen import fees imposed on key US trading allies, even as yet another self-imposed deadline on already-threatened tariffs comes and goes.

July 9 was supposed to mark the return of President Donald Trump's wide-ranging reciprocal tariffs threatened in early April. The scattershot tariff package that imposed tariffs on all imports into the US was mostly delayed until July 9. Now the Trump administration is giving countries another month to deliver better trade deal offers to the Trump team, and additional tariff threats have been added to the pile.

Daily digest market movers: Canadian Dollar takes a hit after fresh risk-off flows bolster the Greenback

  • The Canadian Dollar fell back over one-half of one percent against the rebounding US Dollar on Monday, bolstering the USD/CAD pair back above 1.3650.
  • Loonie losses are set to continue piling up: the Greenback is poised to continue climbing as tariff threats weigh on investor sentiment, and key Canadian employment data due later this week is expected to show a faltering Canadian economy.
  • The Trump administration sent demand letters to countries including South Korea and Japan early this week, announcing an additional 25% tariff on top of currently-suspended reciprocal tariffs.
  • Trump staffers also kicked the tariff deadline down the road this week, pushing the July 9 reciprocal tariff deadline further back to the beginning to August.
  • According to White House Press Secretary Karoline Leavitt, more trade demand letters will be sent out to 12 countries on Monday, with additional letters set to come later.

Canadian Dollar price forecast

The Canadian Dollar's latest bout of bearish pressure has pushed the USD/CAD pair back into a descending trendline just below 1.3700. Daily candlesticks are poised to mark in a double bottom chart pattern, signaling that a long-term turnaround in ongoing Greenback weakness could be coming to a close moving forward.

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.


Date

Created

 : 2025.07.08

Update

Last updated

 : 2025.07.08

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

Gold Price Forecast: XAU/USD declines below $3,350 on hopes for trade deals

The Gold price ( XAU/USD) trades in negative territory near $3,330 during the Asian trading hours on Tuesday, pressured by a firmer US Dollar (USD).
New
update2025.07.08 11:04

Australian Dollar gains ground ahead of RBA policy decision

The Australian Dollar (AUD) gains ground against the US Dollar (USD) on Tuesday, halting its three-day losing streak. The AUD/USD pair registered 1% losses in the previous session amid mounting expectations of a Reserve Bank of Australia (RBA) rate cut in July.
New
update2025.07.08 10:38

PBOC sets USD/CNY reference rate at 7.1534 vs. 7.1506 previous

The People's Bank of China (PBOC) set the USD/CNY central rate for the trading session ahead on Tuesday at 7.1534 as compared to the previous day's fix of 7.1506 and 7.1772 Reuters estimate.
New
update2025.07.08 10:15

NZD/USD gathers strength above 0.6000 as Trump opens to further trade negotiations

The NZD/USD pair recovers some lost ground to near 0.6015, snapping the four-day losing streak during the Asian session on Tuesday.
New
update2025.07.08 10:10

Japan's Ishiba: No tariff deal because Japan kept defending what needs to be defended

Japanese Prime Minister Shigeru Ishiba said early Tuesday that Japan hasn't been able to reach an agreement with the United States because the country kept defending what needs to be defended. 
New
update2025.07.08 09:40

WTI edges lower below $67.00 on stronger US Dollar, OPEC+ oversupply concerns

West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $66.85 during the early Asian trading hours on Tuesday. The WTI price edges lower amid oversupply concerns triggered by the July 6 Organization of the Petroleum Exporting Countries and allies (OPEC+) meeting.
New
update2025.07.08 09:07

GBP/USD pauses losses as Trump's tariff threats increase risk aversion

GBP/USD shed some weight on Monday, trimming further into the low side and adding onto near-term losses as Pound Sterling bulls take a breath.
New
update2025.07.08 08:37

US President Donald Trump extends tariff deadline to August 1 - Bloomberg

The White House said late Monday that US President Donald Trump has signed an executive order pushing the tariff implementation deadline from July to August 1, per Bloomberg.
New
update2025.07.08 08:20

USD/CAD holds positive ground above 1.3650 amid firmer US Dollar

The USD/CAD pair edges higher to near 1.3670 during the early  Asian session on Tuesday. The US Dollar (USD) strengthens against the Canadian Dollar (CAD) after US President Donald Trump announced new tariffs set to go into effect on August 1 for some trading partners. 
New
update2025.07.08 08:10

RBA set to cut interest rate amid soft inflation and weak growth

The Reserve Bank of Australia (RBA) is holding a monetary policy meeting on Tuesday and is set to lower the Official Cash Rate (OCR) by 25 basis points (bps) to 3.60% from 3.85%. The July monetary policy announcement will take place on Tuesday at 04:30 GMT.
New
update2025.07.08 07:45

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