Canadian Dollar Forecast: USD/CAD Jumps with Trump Tariffs to Hit in April
USD/CAD jumps to a fresh weekly high (1.4366) as US President Donald Trump states that the tariffs for Canada will go into effect on April 2.
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Canadian Dollar Outlook: USD/CAD
USD/CAD jumps to a fresh weekly high (1.4366) as US President Donald Trump states that the tariffs for Canada will go into effect on April 2, and the exchange rate may appreciate over the remainder of the month as it carves a series of higher highs and lows.
Canadian Dollar Forecast: USD/CAD Jumps with Trump Tariffs to Hit in April
Keep in mind, USD/CAD broke out of the range bound price action from last week following the failed attempts to test the monthly low (1.4151), and the ongoing change in US trade policy may continue to produce headwinds for the Canadian Dollar as the Bank of Canada (BoC) acknowledges that ‘a protracted trade conflict would most likely lead to weaker GDP and higher prices in Canada.’
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In response, the BoC may pause its rate-cutting cycle as the ‘Bank is committed to maintaining price stability for Canadians,’ but the threat of a trade war may push Governor Tiff Macklem and Co. to further ease monetary policy in 2025 as ‘the resilience of Canada’s economy would be tested.’
With that said, the looming US tariffs may keep USD/CAD afloat as it fuels speculation for lower interest rates in Canada, but the exchange rate may consolidate over the coming days should it snap the recent series of higher highs and lows.
USD/CAD Price Chart – Daily
Chart Prepared by David Song, Senior Strategist; USD/CAD Price on TradingView
- USD/CAD stages a four-day rally following the failed attempt to test the monthly low (1.4151), with a break/close above the 1.4470 (23.6% Fibonacci retracement) to 1.4510 (23.6% Fibonacci extension) region bringing the 1.4600 (61.8% Fibonacci extension) to 1.4660 (38.2% Fibonacci extension) zone on the radar.
- Next area of interest comes in around 1.4790 (50% Fibonacci extension), but lack of momentum to hold above the 1.4210 (78.6% Fibonacci extension) to 1.4270 (38.2% Fibonacci retracement) zone may push USD/CAD back towards the monthly low (1.4151).
- A break/close below 1.4110 (50% Fibonacci extension) opens up the 1.3940 (61.8% Fibonacci retracement) to 1.4000 (62.8% Fibonacci extension) region, which incorporates the December low (1.3991), with the next area of interest coming in around 1.3850 (50% Fibonacci extension).
Additional Market Outlooks
GBP/USD Climbs to Fresh Monthly High to Approach Channel Resistance
Euro Forecast: EUR/USD Continues to Coil Within January Range
Australian Dollar Forecast: AUD/USD Falls from Channel Resistance
USD/JPY Halts Three-Day Selloff to Keep RSI Above Oversold Zone
--- Written by David Song, Senior Strategist
Follow on Twitter at @DavidJSong
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