Created
: 2025.07.23
- 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 extends the decline to near 1.3600 as Trump's tariff deadline looms
World FX news
Breaking news
USD/CAD extends the decline to near 1.3600 as Trump's tariff deadline looms
2025.07.23 08:20
2025.07.23 08:20
- USD/CAD tumbles to near 1.3605 in Wednesday's early Asian session.
- Canadian PM said he'll only sign a US trade deal in the best interest of Canadians.
- Worries about tariff uncertainty and Fed independence weigh on the US Dollar.
The USD/CAD pair extends its downside to around 1.3605 during the early Asian session on Wednesday. The Canadian Dollar (CAD) edges higher to a two-week high against the US Dollar (USD) amid unabated uncertainty over trade policy. Investors await the preliminary reading of US S&P Global Purchasing Managers Index (PMI) reports for July, which will be released later on Thursday.
Canadian Prime Minister Mark Carney emphasized that his government will only sign a new agreement if there is one worth signing. "The Government of Canada will not accept a bad deal," said Carney on Tuesday. Additionally, Carney stated that while the Canadian government remains open to further trade talks with the US, the country will continue to pursue active negotiations with allies outside of the US.
Analysts believe the prospect of Canada reaching a trade agreement with the US by the August 1 deadline appears uncertain. This, in turn, continues to weigh on the US Dollar (USD) in the near term.
Concerns over the Federal Reserve (Fed) independence might also drag the Greenback lower as US President Donald Trump has repeatedly railed against Chair Jerome Powell and urged him to resign because of the US central bank's reluctance to cut interest rates.
On the other hand, a decline in Crude Oil prices could undermine the commodity-linked Loonie. It's worth noting that Canada is the largest oil exporter to the US and lower crude oil prices tend to have a negative 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
: 2025.07.23
Related articles
GBP/USD edges higher as mixed US data weighs on Greenback
16 minutes agoUS Industrial Production contracts by 0.1% in July
2025.08.15 22:21Fed's Goolsbee: Don't need to hold rates for ever
2025.08.15 22:20EUR/USD rebounds as US Retail Sales miss trims Fed rate cut expectations
2025.08.15 22:14GBP/JPY retreats as strong Japan GDP boosts Yen and fuels BoJ tightening bets
2025.08.15 21:40US EIA expects an oversupply, lower oil prices, and falling US oil production - Commerzbank
2025.08.15 20:57
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
GBP/USD edges higher as mixed US data weighs on Greenback
The British Pound (GBP) gains traction against the US Dollar (USD)on Friday as the Greenback came under pressure following mixed US economic data, with GBP/USD paring most of Thursday's losses. At the time of writing, the pair is trading near 1.1356 during the American trading hours.
New
2025.08.15 23:09US Industrial Production contracts by 0.1% in July
Industrial Production in the United States (US) contracted by 0.1% on a monthly basis in July, the data published by the Federal Reserve (Fed) showed on Friday. This reading followed the 0.4% increase recorded in June and came in worse than the market expectation for a no change.
New
2025.08.15 22:21Fed's Goolsbee: Don't need to hold rates for ever
In a CNBC interview, Austan Goolsbee, President of the Federal Reserve Bank of Chicago, said rates do not need to be kept "forever" and that if inflation returns to its earlier benign trend, it would be appropriate to lower rates toward their long-term level.
New
2025.08.15 22:20EUR/USD rebounds as US Retail Sales miss trims Fed rate cut expectations
The Euro (EUR) edges higher against the US Dollar (USD) on Friday, with EUR/USD rebounding toward the 1.1700 mark as mixed US macroeconomic data weighs on the Greenback.
New
2025.08.15 22:14GBP/JPY retreats as strong Japan GDP boosts Yen and fuels BoJ tightening bets
The GBP/JPY cross is edging lower on Friday, with the cross weakening toward the 199.50 handle after briefly touching the 200.00 psychological level on Thursday.
New
2025.08.15 21:40Chile revises Copper production forecast downward - Commerzbank
Chile's state-owned Copper producer estimates production losses at its El Teniente mine due to the tunnel collapse and the resulting production stoppage lasting several days at 20-30 thousand tons, Commerzbank's commodity analyst Carsten Fritsch notes.
New
2025.08.15 21:03The IEA forecasts suggest a massive oversupply next year - Commerzbank
The International Energy Agency has left its forecast for Oil demand virtually unchanged and continues to expect increases of just under 700,000 barrels per day for this year and next.
New
2025.08.15 21:00US EIA expects an oversupply, lower oil prices, and falling US oil production - Commerzbank
The US Energy Information Administration (EIA), in contrast, has significantly revised its estimate of the supply surplus on the oil market upwards and now expects inventories to build by more than 2 million barrels per day in the fourth quarter of 2025 and the first quarter of 2026.
New
2025.08.15 20:57Gold holds near two-week low ahead of US Retail Sales data
Gold (XAU/USD) rebounds modestly on Friday, supported by a softer US Dollar (USD), though the recovery remains shallow with prices pinned near a two-week low.
New
2025.08.15 20:56OPEC predicts tight Oil market - Commerzbank
In its monthly report, OPEC has slightly raised its forecast for Oil demand next year, Commerzbank's commodity analyst Carsten Fritsch notes.
New
2025.08.15 20:55Disclaimer:
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
