Created
: 2025.07.18
- 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 trades with negative bias below mid-1.3700s, lacks bearish conviction
World FX news
Breaking news
USD/CAD trades with negative bias below mid-1.3700s, lacks bearish conviction
New
2025.07.18 14:21
2025.07.18 14:21
2025.07.18 14:21
- USD/CAD attracts some sellers as Fed Governor Waller's dovish remarks undermine the USD.
- Reduced Fed rate cut bets help limit the USD downside and lend support to the currency pair.
- Trade-related uncertainties offset an uptick in Oil prices and might keep a lid on the Loonie.
The USD/CAD pair drifts lower during the Asian session on Friday and moves away from a three-and-a-half-week high, around the 1.3775 region touched the previous day. Spot prices, however, lack bearish conviction and trade just below mid-1.3700s, down less than 0.10% for the day.
The US Dollar (USD) retreats slightly from its highest level since June 23 in reaction to dovish comments from Federal Reserve (Fed) Governor Christopher Waller, saying that the central bank should cut its interest rate target in July. Apart from this, the upbeat market mood turns out to be another factor acting as a headwind for the safe-haven buck and exerting some downward pressure on the USD/CAD pair.
Any meaningful USD depreciation, however, seems elusive amid bets that the Fed will keep interest rates higher for longer amid inflationary concerns. The Canadian Dollar (CAD), on the other hand, might struggle to attract strong follow-through buyers on the back of persistent trade-related uncertainties. In fact, Trump announced a 35% tariff on imports from Canada, which will go into effect on August 1.
Trump added that levies would increase further if Canada retaliated. Adding to this, a 50% tariff on US copper imports should keep a lid on the CAD and offer support to the USD/CAD pair. Meanwhile, Crude Oil prices edge higher and look to build on the overnight bounce, though the upside remains limited. This might further contribute to capping the commodity-linked Loonie and limiting losses for the USD/CAD pair.
Traders now look to the US economic docket - featuring the release of Preliminary Michigan US Consumer Sentiment and Inflation Expectations, along with housing market data. Moreover, the broader risk sentiment will drive the USD. Adding to this, Oil price dynamics should provide some impetus to the USD/CAD pair. Nevertheless, spot prices remain on track to register modest gains for the second straight week.
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.
Tariffs FAQs
Tariffs are customs duties levied on certain merchandise imports or a category of products. Tariffs are designed to help local producers and manufacturers be more competitive in the market by providing a price advantage over similar goods that can be imported. Tariffs are widely used as tools of protectionism, along with trade barriers and import quotas.
Although tariffs and taxes both generate government revenue to fund public goods and services, they have several distinctions. Tariffs are prepaid at the port of entry, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and businesses, while tariffs are paid by importers.
There are two schools of thought among economists regarding the usage of tariffs. While some argue that tariffs are necessary to protect domestic industries and address trade imbalances, others see them as a harmful tool that could potentially drive prices higher over the long term and lead to a damaging trade war by encouraging tit-for-tat tariffs.
During the run-up to the presidential election in November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy and American producers. In 2024, Mexico, China and Canada accounted for 42% of total US imports. In this period, Mexico stood out as the top exporter with $466.6 billion, according to the US Census Bureau. Hence, Trump wants to focus on these three nations when imposing tariffs. He also plans to use the revenue generated through tariffs to lower personal income taxes.
Last updated
: 2025.07.18
Related articles
US Dollar Index (DXY) retreats below 98.00 on risk appetite, lower US yields
22 minutes agoGBP/JPY hits fresh YTD highs above 199.85 amid generalised Yen weakness
2025.07.18 16:53Forex Today: US Dollar consolidates weekly gains as focus shifts to US confidence data
2025.07.18 16:36AUD/JPY jumps to near 96.80 as Yen underperforms ahead of Japan's elections
2025.07.18 16:30Pound Sterling set for third straight week of losses amid growing UK labor market concerns
2025.07.18 16:24EUR/GBP strengthens above 0.8650 as traders raise bets on BoE rate cut
2025.07.18 15:58
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
US Dollar Index (DXY) retreats below 98.00 on risk appetite, lower US yields
The US Dollar is trading with a moderate negative tone on Friday. The risk-on mood triggered by the upbeat US corporate earnings seen on Thursday has extended to Friday's European session, boosting demand for equities and pulling US yields and the USD lower.
New
2025.07.18 17:32GBP/JPY hits fresh YTD highs above 199.85 amid generalised Yen weakness
The Pound is keeps marching higher for the second consecutive day as the Japanese Yen struggles, hammered by a mix of lack of progress in the trade talks with the US, rising political uncertainty, and easing inflationary trends, which muddle the BoJ's monetary policy outlook.The broad-based Yen weak
New
2025.07.18 16:53Forex Today: US Dollar consolidates weekly gains as focus shifts to US confidence data
Here is what you need to know on Friday, July 18:
New
2025.07.18 16:36AUD/JPY jumps to near 96.80 as Yen underperforms ahead of Japan's elections
The AUD/JPY pair climbs to near 96.80 during the European trading session on Friday. The cross demonstrates strength as the Japanese Yen (JPY) underperforms across the board amid uncertainty surrounding elections in Japan on Sunday.
New
2025.07.18 16:30Pound Sterling set for third straight week of losses amid growing UK labor market concerns
The Pound Sterling (GBP) ticks up slightly on Friday, but remains near an over two-month low around 1.3375 during the European trading session The outlook of the GBP/USD pair, which is set to close in the red for a third consecutive week, remains vulnerable due to growing concerns about the United
New
2025.07.18 16:24EUR/GBP strengthens above 0.8650 as traders raise bets on BoE rate cut
The EUR/GBP cross gains ground to near 0.8655 during the early European session on Friday. The Pound Sterling (GBP) edges lower against the Euro (EUR) as the UK Unemployment Rate hits the highest level in four years.
New
2025.07.18 15:58Crude oil price today: WTI price bullish at European opening
West Texas Intermediate (WTI) Oil price advances on Friday, early in the European session. WTI trades at $66.38 per barrel, up from Thursday's close at $66.30.Brent Oil Exchange Rate (Brent crude) is also up, advancing from the $68.89 price posted on Thursday, and trading at $68.96.
New
2025.07.18 15:01WTI advances to near $66.50 following attacks on Iraqi Oilfields
West Texas Intermediate (WTI) Oil price extends its gains for the second successive day, trading around $66.40 per barrel during the Asian hours on Friday. Crude Oil prices receive support from concerns over supply risks.
New
2025.07.18 14:43US to impose 93.5% anti-dumping levy on China battery material - Bloomberg
The US Commerce Department said on Friday that it will impose preliminary anti-dumping duties on imports of Chinese graphite, which are a key component for electric vehicle batteries, after concluding that the materials had been unfairly subsidized, per Bloomberg.
New
2025.07.18 14:39USD/CHF tumbles to below 0.8050 on tariff uncertainty
The USD/CHF pair tumbles to around 0.8030 during the early European session on Friday. Persistent trade tensions and Federal Reserve (Fed) policy uncertainty boost the safe-haven demand, supporting the Swiss Franc (CHF).
New
2025.07.18 14:22Disclaimer:
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
