Canadian Dollar Forecast: USD/CAD Faces BoC Rate Cut as Trump Tariffs Loom
USD/CAD further retrace the decline from earlier this month as the Bank of Canada (BoC) is expected to deliver another 25bp rate-cut.
Share this:
Canadian Dollar Outlook: USD/CAD
USD/CAD trades within the February range even as US President Donald Trump continues to adjust tariffs for Canada, but the exchange rate may further retrace the decline from earlier this month as the Bank of Canada (BoC) is expected to deliver another 25bp rate-cut.
Canadian Dollar Forecast: USD/CAD Faces BoC Rate Cut as Trump Tariffs Loom
USD/CAD seems to be defending the advance following Canada’s weaker-than-expected employment report as it carves a series of higher highs and lows, and signs of slowing job growth may push the BoC to retain the current course for monetary policy as the economy adds 1.1K jobs in February versus forecasts for a 20.0K rise.
Join David Song for the Weekly Fundamental Market Outlook webinar.
David provides a market overview and takes questions in real-time. Register Here
Canada Economic Calendar
In turn, the BoC may continue to carry out its rate-cutting cycle as the central bank acknowledges that ‘Canada’s labour market remains soft,’ and Governor Tiff Macklem and Co. may retain a dovish forward guidance as the ongoing shift in US trade policy clouds the outlook for growth.
With that said, USD/CAD may further retrace the decline from the monthly high (1.4543) as it bounces back ahead of the February low (1.4151), but a hawkish BoC rate-cut may curb the recent advance in the exchange rate as the central bank seems to be at or approaching the neutral rate.
USD/CAD Price Chart – Daily
Chart Prepared by David Song, Senior Strategist; USD/CAD Price on TradingView
- USD/CAD carves a series of higher highs and lows after struggling to break/close back below the 1.4210 (78.6% Fibonacci extension) to 1.4270 (38.2% Fibonacci retracement) zone, with a breach above the 1.4470 (23.6% Fibonacci retracement) to 1.4510 (23.6% Fibonacci extension) region raising the scope for a move towards the monthly high (1.4543).
- Next area of interest comes in around 1.4600 (61.8% Fibonacci extension) to 1.4660 (38.2% Fibonacci extension), but USD/CAD may track the flattening slope in the 50-Day SMA (1.4350) if it struggles to hold above the moving average.
- Need a break/close below the 1.4210 (78.6% Fibonacci extension) to 1.4270 (38.2% Fibonacci retracement) zone to bring the February low (1.4151) on the radar, with the next area of interest coming in around 1.4110 (50% Fibonacci retracement).
Additional Market Outlooks
Gold Price Outlook Hinges on Response to Positive Slope in 50-Day SMA
US Dollar Forecast: USD/JPY Weakness Pushes RSI Towards Oversold Zone
British Pound Forecast: GBP/USD Holds Above Channel Resistance
EUR/USD Rally Persist Even as ECB Pursues Less Restrictive Policy
--- Written by David Song, Senior Strategist
Follow on Twitter at @DavidJSong
Related tags:
The complete CFD trading experience
Award-winning platforms, competitive spreads, low commissions and dedicated support.
We live and breathe the markets and are dedicated to helping traders realise their ambitions as we continue to set the industry bar.
Economic calendar
Web Trader platform
Our sophisticated web-based platform is packed with features.
Related articles
USD/CAD reversal risk builds as central bank showdown looms
USD/CAD has delivered a bullish reversal signal from established support, just as traders prepare for Fed and BoC decisions. Aggressive Canadian rate hike expectations and conflicting momentum signals make the coming session important.
USD/CAD and USD/MXN Q4 2026 Outlook: Will the U.S. Dollar Dominate North America Again?
The final stretch of 2026 is approaching, and North America's major currencies have begun to show a shift in the strength dynamics seen earlier in the year. New expectations of a more aggressive monetary policy stance, particularly in the United States, could be significantly reshaping the outlook for the region. At the same time, this backdrop, combined with potential trade tensions across North America, may become one of the most important drivers of currency performance in the months ahead.
USD/CAD Analysis: Is the Canadian Dollar Running Out of Support?
A new trading week is underway, and the Canadian dollar continues to show signs of weakening momentum. This can be seen in recent USD/CAD price action, with the pair gaining nearly 0.7% over the last four trading sessions.
StoneX Europe Ltd may make third party material available on this website which may contain information included but not limited to the conditions of financial markets. The material is for information purposes only and does not contain, and should not be construed as containing, investment advice and/or investment recommendation and/or an investment research and/or an offer of or solicitation for any transactions in financial instruments; any decision to enter into a specific transaction shall be made by the client following an assessment by him/her of their situation.
StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.