Created
: 2025.09.01
- 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 remains below 1.3750 as Fed rate cut bets weigh on US Dollar
World FX news
Breaking news
USD/CAD remains below 1.3750 as Fed rate cut bets weigh on US Dollar
New
2025.09.01 13:19
2025.09.01 13:19
2025.09.01 13:19
- USD/CAD depreciates as the US Dollar struggles amid rising odds of Fed rate cuts.
- US inflation increased in July, a rise partly attributed to President Trump's tariffs.
- The commodity-linked CAD may have come under pressure from weaker Oil prices.
USD/CAD loses ground for the fifth consecutive session, trading around 1.3740 during the Asian hours on Monday. The pair depreciates as the US Dollar (USD) faces challenges amid rising bets of an interest rate cut by the US Federal Reserve (Fed) in the September meeting. However, the volumes are expected to be low as the United States (US) and Canadian markets will observe the Labor Day holiday on Monday.
San Francisco Fed President Mary Daly said on Sunday that policymakers will be ready to cut interest rates soon, adding that inflation stemming from tariffs will likely prove temporary, per Bloomberg.
Friday's data showed that United States (US) inflation rose in July, which could be attributed to US President Donald Trump's tariffs. US Personal Consumption Expenditures (PCE) Price Index held steady at 2.6% year-over-year in July, coming in line with the market expectation. The US core PCE Price Index, which excludes volatile food and energy prices, rose 2.9% YoY in July, as expected, following June's increase of 2.8%. On a monthly basis, the core PCE Price Index rose 0.2% and 0.3%, respectively.
The US Court of Appeals for the Federal Circuit upheld a ruling that the sweeping tariffs the US President Donald Trump unilaterally imposed on most other countries were illegal, CNN reported on Friday. US Trade Representative Jamieson Greer said in a Fox News interview on Sunday that US President Donald Trump's administration will likely continue negotiations with its trade partners despite a US court ruling.
The downside of the USD/CAD pair could be restrained as the commodity-linked Canadian Dollar (CAD) could have faced challenges amid weaker Oil prices. It is noteworthy that Canada is the largest Oil exporter to the United States (US).
West Texas Intermediate (WTI) Oil price extends its losses for the second successive session, trading around $63.50 per troy ounce at the time of writing. Crude Oil prices struggle due to prevailing oversupply concerns and weaker demand prospects.
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
: 2025.09.01
Related articles
CAD underperforms as spreads widen, crude softens - Scotiabank
2025.09.03 20:17Global PMI: August inventory upswing - Standard Chartered
2025.09.03 20:13USD/CAD hesitates below 1.3800 ahead of US employment, industrial data
2025.09.03 19:56WTI Price Forecast: Bearish bias prevails under 100-day EMA near $65.00
2025.09.03 15:55Crude Oil price today: WTI price bearish at European opening
2025.09.03 15:06WTI posts modest gain above $65.00 on rising supply concerns
2025.09.03 09:14
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 extends rally above $3,550 as weak US JOLTS data lifts Fed cut bets
Gold price extended its gains on Wednesday and is up more than 1%, poised to register record highs during the day, after clearing the mid-point of the $3,500-$3,600 range as economic data from the United States showed the labor market is weakening.
New
2025.09.04 03:45Dow Jones Industrial Average left behind as tech stocks rise
The Dow Jones Industrial Average (DJIA) missed the bullish bus on Wednesday, lagging its index peers and slumping over 250 points.
New
2025.09.04 03:10Forex Today: The US labour market will be in the spotlight
The US Dollar (USD) traded on the defensive, setting aside gains recorded in the previous day as investors assessed the recent sharp advance in global yields, while further cooling of the US labour market also weighed down on the Greenback.
New
2025.09.04 03:05Fed's Kashkari warns that tariffs are pushing up goods prices
Federal Reserve (Fed) Bank of Minneapolis President Neel Kashkari flashed another policy warning sign on Wednesday, cautioning that tariffs are pushing the consumer-facing costs of goods higher, resulting in climbing inflation figures.
New
2025.09.04 02:47Fed Governor Prospect Stephen Miran promises to uphold Fed independence if confirmed
Stephen Miran, United States (US) Council of Economic Advisors (CEA) member and US President Donald Trump's pick to fill a recently-vacated seat on the Federal Reserve's (Fed) Board of Governors, swore that he would uphold the Fed's political independence if he were to be confirmed by Congress.
New
2025.09.04 02:42UK Chancellor Reeves waves off £50 billion budget deficit forecast
United Kingdom (UK) Chancellor of the Exchequer Rachel Reeves dismissed concerns from Britain's National Institute of Economic and Social Research (NIESR) that the UK government may need to dip into International Monetary Fund (IMF) funding pools in the future if Parliament can't sort out its budge
New
2025.09.04 01:55EUR/USD rebounds to 1.1680 as weak US data fuels Fed cut bets
The EUR/USD recovers ground following Tuesday's losses that drove the pair below key support levels around the 50 and 20-day SMAs. A confirmation of weakness in the US labor market by JOLTS data, increased the chances of a rate cut by the Federal Reserve. The pair trades at 1.1679, up 0.37%.
New
2025.09.04 00:52GBP/USD rises to 1.3440 as strong UK data offsets US weakness
The GBP/USD advances during the North American session up by 0.39% following the release of economic data from the United States (US). Also, fears of the UK's government being unable to meet its fiscal requirements eased on signs that the economy continued to fare well.
New
2025.09.04 00:24Gold extends rally, notches new record-high above $3,560
Gold extended its uptrend in the second half of the day on Wednesday and touched a new record-high above $3,560. At the time of press, XAU/USD was trading near $3,560, rising 0.85% on a daily basis. For the week, Gold is already up more than 3%.
New
2025.09.03 23:29Fed's Bostic: Inflation is still the main concern
Atlanta Fed President Raphael Bostic said that high inflation remained the Federal Reserve's main risk, but added that signs of labour market weakness still pointed to a single quarter-point rate cut this year.
New
2025.09.03 23:14Disclaimer:
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
