Created
: 2025.08.28
- 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
Canadian Dollar extends gains as risk-on flows rebound
World FX news
Breaking news
Canadian Dollar extends gains as risk-on flows rebound
2025.08.28 03:50
2025.08.28 03:50
- A fresh round of Greenback hesitation bolstered the Canadian Dollar on Wednesday.
- Global market sentiment is tilted into the bullish side, giving counter-currencies a leg up.
- Canadian GDP due on Friday, to be overshadowed by US PCE inflation figures.
The Canadian Dollar (CAD) drifted higher on Wednesday, driven by a general upswing in broad-market sentiment that pushed the safe-haven US Dollar (USD) into a holding pattern. The Loonie has risen for three out of the last four trading sessions, extending a near-term CAD bounce from recent lows.
Canadian data remained largely absent from the economic calendar through the front half of the trading week, keeping CAD momentum limited. Key Canadian Gross Domestic Product (GDP) growth figures due on Friday are set to be eclipsed by the latest round of US Personal Consumption Expenditures Price Index (PCE) inflation numbers, which are also due on Friday.
Daily digest market movers: CAD catches a bid on thin Greenback markets
- The Canadian Dollar rose around one-third of one percent against the US Dollar on Wednesday.
- As the USD/CAD pair eases back from recent highs, price action could be poised for a technical bounce from the 50-day Exponential Moving Average (EMA); traders should watch out for any immediate reversals.
- Canadian GDP growth figures are expected to show a 0.6% contraction in Q2.
- Before that, Loonie traders will need to escape another US GDP print unscathed on Thursday.
- Friday will poise a complex intraday problem for CAD traders: on top of Canadain growth data, markets will be faced with the simultaneous release of the latest US PCE inflation figures from July.
- Core US PCE inflation is expected to tick upwards on a yearly basis as tariff-led inflation continues to bleed through into headline inflation data.
Canadian Dollar price forecast
The Canadian Dollar has clawed back over a full percent against the US Dollar after hitting a 13-week low last Friday. USD/CAD has chalked in a bearish rejection of the 200-day EMA near 1.3880, while the 50-day EMA is providing an immediate technical floor from 1.3777. The pair's higher-lows pattern remains intact, though a drop through 1.3750 will put USD/CAD back on track to revisit the 1.3600 handle.
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.
Last updated
: 2025.08.28
Related articles
EUR/USD slips as Dollar rebounds, French protests weigh on sentiment
2025.09.20 05:56Australian Dollar heads for weekly decline amid cautious Fed outlook
2025.09.20 04:21Fed's Daly says Fed cut rates to support labor market
2025.09.20 04:12Canadian Dollar pares losses despite Retail Sales miss, bucks Greenback trend
2025.09.20 03:46Banxico seen cutting rates to 7.50% in September - Reuters
2025.09.20 03:25Canadian Dollar firms despite weaker July Retail Sales
2025.09.20 00:38
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
EUR/USD slips as Dollar rebounds, French protests weigh on sentiment
EUR/USD edges lower on Friday, late in the North American session, as the Greenback recovers after bouncing off three-year lows reached in the aftermath of the Federal Reserve's (Fed) interest rate cut.
New
2025.09.20 05:56Australian Dollar heads for weekly decline amid cautious Fed outlook
The Australian Dollar (AUD) trades on the back foot against the US Dollar (USD) on Friday, with AUD/USD extending its decline for the third straight day.
New
2025.09.20 04:21Fed's Daly says Fed cut rates to support labor market
Federal Reserve (Fed) Bank of San Francisco President Mary C. Daly noted late on Friday that the Fed's move to cut rates was to try and bolster a weakening labor market, noting a pointed softening of the US economy over the past year.
New
2025.09.20 04:12Canadian Dollar pares losses despite Retail Sales miss, bucks Greenback trend
The Canadian Dollar (CAD) shrugged off broad-market performance on Friday, chalking in a 0.15% gain against the US Dollar (USD), the second-best currency on the books for the day.
New
2025.09.20 03:46Gold rebounds above $3,670 as dip buyers step in despite firm US Dollar
Gold price reverses its course on Friday after printing back-to-back bearish session, rises over 0.69% despite overall US Dollar strength across the board. Buyers emerged near the lows of the week at around $3,630 and drove the non-yielding metal higher.
New
2025.09.20 03:28Banxico seen cutting rates to 7.50% in September - Reuters
Banco de Mexico (Banxico), Mexico's central bank is expected to reduce its main reference rate by 25 basis points to 7.50% on September 26, revealed a Reuters poll.
New
2025.09.20 03:25WTI extends declines as strong US Dollar and weak demand overshadow Fed rate cut
West Texas Intermediate (WTI) Crude Oil remains under pressure on Friday, extending its losing streak for the third straight day. The US benchmark has surrendered all the gains it notched earlier in the week and is now poised to end the week in negative territory.
New
2025.09.20 03:24Dow Jones Industrial Average chalks up strong weekly performance post-Fed
The Dow Jones Industrial Average (DJIA) chalked in another slim but decisive gain on Friday, bringing the major equity index's weekly performance to around a full percentage point gain.
New
2025.09.20 02:45Stephen Miran confirms he was the 'bottom dot', insists immigration policy is deflationary
Newly minted Federal Reserve (Fed) Board of Governors member Stephen Miran, in a stiff departure from standard Fed rhetoric policy, revealed exactly where his opinion landed in the Federal Open Market Committee's (FOMC) latest Summary of Economic Projections (SEP).
New
2025.09.20 01:47Canadian Dollar firms despite weaker July Retail Sales
The Canadian Dollar (CAD) strengthens against the US Dollar (USD) on Friday, with USD/CAD snapping a two-day winning streak and trimming earlier intraday losses despite a firmer Greenback and softer Retail Sales data.
New
2025.09.20 00:38Disclaimer:
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
