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
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
Banxico Rodriguez: MXN gains from US tariff view, policy stance adequate
44 minutes agoEUR/USD dips as traders brace for US CPI and geopolitical developments
2025.08.12 05:50Dow Jones Industrial Average eases as investors brace for CPI
2025.08.12 04:03Forex Today: US CPI data and the RBA meeting will be the salient events
2025.08.12 03:58Australian Dollar consolidates ahead of RBA rate call; traders eye US inflation data
2025.08.12 03:58Donald Trump extends tariff deadline for China by another 90 days
2025.08.12 03:40
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
Banxico Rodriguez: MXN gains from US tariff view, policy stance adequate
In an interview with El Financiero, Victoria Rodriguez Ceja, Banco de Mexico (Banxico) Governor, said that the Mexican Peso (MXN) strength was due to the market's perception of Mexico's "preferential treatment" in the US tariffs policy.
New
2025.08.12 06:08EUR/USD dips as traders brace for US CPI and geopolitical developments
The EUR/USD edges lower on Monday, down 0.26% as the Greenback is bought by traders ahead of another inflation report in the United States (US) coming Tuesday.
New
2025.08.12 05:50Dow Jones Industrial Average eases as investors brace for CPI
The Dow Jones Industrial Average (DJIA) fell back on Monday, shedding around 200 points and testing below 44,000 once again as investors brace for the latest United States (US) Consumer Price Index (CPI) inflation figures due on Tuesday.
New
2025.08.12 04:03Forex Today: US CPI data and the RBA meeting will be the salient events
The US Dollar (USD) added to Friday's advance amid the generalised prudence among market participants ahead of the publication of the US inflation data, while a potential Trump-Putin meeting also helped with the cautious environment.
New
2025.08.12 03:58Australian Dollar consolidates ahead of RBA rate call; traders eye US inflation data
The Australian Dollar (AUD) trades with a slightly negative tone against the US Dollar (USD) on Monday, with AUD/USD holding steady above the 0.6500 level as investors brace for Tuesday's Reserve Bank of Australia (RBA) monetary policy decision.
New
2025.08.12 03:58Donald Trump extends tariff deadline for China by another 90 days
US President Donald Trump hit markets with fresh trade headlines late on Monday, this time refocusing his efforts on negotiating trade deals with the Chinese government. Trump has announced that hefty tariffs aimed at Chinese goods will again be delayed, pushing back the deadline by 90 days.
New
2025.08.12 03:40Gold price slumps as traders eye US CPI, Trump-Putin summit
Gold price dives during the North American session as traders waited for the White House resolution on duties over physical Bullion bars, which triggered a downturn last Friday in the futures market. Traders awaiting the release of inflation data in the United States (US) pushed spot prices down.
New
2025.08.12 03:18EUR/JPY steady as markets eye Trump-Putin talks on Ukraine
The EUR/JPY pair is holding steady around 171.75 in Monday's session, with a slightly weaker Euro (EUR) against the Japanese Yen (JPY) reflecting a cautious market mood as attention shifts to geopolitics.
New
2025.08.12 01:50Canadian Dollar backslides as Greenback bounces ahead of critical CPI inflation
The Canadian Dollar (CAD) retreated on Monday, falling one-fifth of one percent against the US Dollar (USD) ahead of the latest US Consumer Price Index (CPI) inflation print on Tuesday.
New
2025.08.12 01:50Trump still angling to broker Russian ceasefire and cuts deals with chipmakers
United States (US) President Donald Trump hit the wires on Monday, announcing his intention to continue trying to broker a ceasefire between Russia and Ukraine in the coming days.
New
2025.08.12 01:21Disclaimer:
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
