Canadian Dollar Forecast: USD/CAD Coils Ahead of Reciprocal Trump Tariffs
USD/CAD still trades within the February range as it failed to clear the monthly high (1.4543) during the previous week.
Share this:
Canadian Dollar Outlook: USD/CAD
USD/CAD still trades within the February range as it failed to clear the monthly high (1.4543) during the previous week, but the ongoing shift in US trade policy may continue to sway the exchange rate with President Donald Trump on track to impose reciprocal tariffs on April 2.
Canadian Dollar Forecast: USD/CAD Coils Ahead of Reciprocal Trump Tariffs
USD/CAD snaps the range bound price action from last week to approach the monthly low (1.4239), and the exchange rate may struggle to retain the advance from the February low (1.4151) as the Bank of Canada (BoC) seems to be at or nearing the end of its rate-cutting cycle.
The BoC warns that ‘monetary policy cannot offset the impacts of a trade war’ after reducing interest rates for seven consecutive meeting, and Governor Tiff Macklem and Co. may move to the sidelines as the ‘Governing Council will be carefully assessing the timing and strength of both the downward pressures on inflation from a weaker economy and the upward pressures on inflation from higher costs.’
Join David Song for the Weekly Fundamental Market Outlook webinar.
David provides a market overview and takes questions in real-time. Register Here
In turn, the deviating paths between the BoC and Federal Reserve may keep USD/CAD under pressure as the Fed prepares to further unwind its restrictive policy, and data prints coming out of Canada may fuel the recent decline in the exchange rate as the Consumer Price Index (CPI) is anticipated to show sticky inflation.
Canada Economic Calendar
Canada’s CPI is expected to increase to 2.1% in February from 1.9% per annum the month prior, and signs of persistent inflation may generate a bullish reaction in the Canadian Dollar as it puts pressure on the BoC to keep interest rates on hold at its next meeting on April 16.
With that said, USD/CAD may continue to give back the advance from the monthly low (1.4239) as it starts to carve a series of lower highs and lows, but a softer-than-expected Canada CPI print may curb the recent decline the exchange rate as it fuels speculation for further BoC rate-cuts.
USD/CAD Price Chart – Daily
Chart Prepared by David Song, Senior Strategist; USD/CAD Price on TradingView
- USD/CAD approaches the monthly low (1.4239) following the string on failed attempts to close above the 1.4470 (23.6% Fibonacci retracement) to 1.4510 (23.6% Fibonacci extension) region, and lack of momentum to hold above the 1.4210 (78.6% Fibonacci extension) to 1.4270 (38.2% Fibonacci retracement) zone may push the exchange rate towards the February low (1.4151).
- Next area of interest comes in around 1.4110 (50% Fibonacci retracement), but USD/CAD may track the flattening slope in the 50-Day SMA (1.4350) should it continue to hold within the February range.
- Need a move back above the 1.4470 (23.6% Fibonacci retracement) to 1.4510 (23.6% Fibonacci extension) region to bring the monthly high (1.4543) on the radar, with the next area of interest coming in around 1.4600 (61.8% Fibonacci extension) to 1.4660 (38.2% Fibonacci extension).
Additional Market Outlooks
EUR/USD Rebounds Ahead of Weekly Low to Keep RSI in Overbought Zone
USD/JPY Rebound in Focus with BoJ Expected to Hold Interest Rate
Gold Record High Price Pushes RSI Towards Overbought Zone
British Pound Forecast: GBP/USD Pulls Back Ahead of November High
--- Written by David Song, Senior Strategist
Follow on Twitter at @DavidJSong
Related tags:
Latest market news
Open an account in minutes
Experience award-winning platforms with fast and secure execution, and enjoy tight spreads from 0.5 pts on FX and 0.3 pts on indices.
Economic calendar
Web Trader platform
Our sophisticated web-based platform is packed with features.
Related articles
USDCAD Forecast Fed expectations keep pressure on the Canadian dollar
Despite the Canadian dollar’s recovery attempts in previous weeks, a renewed loss of strength against the U.S. dollar is becoming evident. This is reflected in USD/CAD, which has gained more than 0.2% over the last 2 trading sessions, including the close of last week and the first session of this week.
USDCAD Forecast Canadian dollar weakens as tariff fears return
The week continues to move in favor of the US dollar against its main rivals, and this is also reflected in USD/CAD price action. Over the last three trading sessions, the pair has gained more than 0.6%, showing that the Canadian dollar continues to lose ground in a meaningful way.
Bitcoin Price Outlook: Dip Buying Near $60K in Focus
Bitcoin dip-buying interest remains in focus as the cryptocurrency tests critical lows and momentum levels. Risk-off sentiment across the market remains broadly correlated, keeping key crypto regulatory developments in sight to confirm a possible structural turn.
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
StoneX Financial Pte. Ltd. is not under any obligation to update this report.
Trading CFDs carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.forex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.