The USD/CAD pair retreated slightly after reaching a multi-year high, with traders awaiting key economic data for direction. While profit-taking and crude oil price increases put pressure on the US dollar, a combination of factors, including political instability in Canada and a hawkish Fed outlook, could limit further losses for the USD/CAD.
USD/CAD experienced some profit-taking after reaching a fresh multi-year high on Thursday. The fundamental landscape suggests caution before anticipating deeper declines. Traders are currently focusing on the final US Q3 GDP and Jobless Claims data for short-term direction. The USD/CAD pair retreated slightly after hitting its highest level since March 2020, around the 1.4465 region during the Asian session on Thursday, seemingly ending a five-day winning streak.
Spot prices currently trade near the 1.4430 area, the daily low, although any substantial corrective decline appears unlikely. The US Dollar (USD) entered a bullish consolidation phase following the previous day's post-FOMC surge to a two-year high, prompting profit-taking around the USD/CAD pair amid overbought conditions on the daily chart. Additionally, a rise in Crude Oil prices supports the commodity-linked Loonie and exerts further pressure on the pair, although a combination of factors should help limit any additional losses. In a surprising political development, Canada’s Deputy Prime Minister and Finance Minister Chrystia Freeland resigned earlier this week, citing disagreements with Prime Minister Justin Trudeau over economic strategy and US tariff threats. This, coupled with the Bank of Canada's (BoC) aggressive policy easing and dovish outlook, should act as a headwind for the Canadian Dollar (CAD) and support the USD/CAD pair. Meanwhile, the Federal Reserve (Fed) presented a more hawkish view on the outlook for 2025 and indicated that it would slow the pace of rate cuts. This continues to push US Treasury bond yields higher, which, along with the risk-off sentiment, supports prospects for a further near-term appreciation of the safe-haven buck. Consequently, a strong follow-through selling is necessary to confirm that the USD/CAD pair has reached its peak
USD/CAD Forex Interest Rates Economic Data Canadian Dollar
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
USD/CAD Price Forecast: Finds support near 1.4100 after pulling back from multi-year highsUSD/CAD extends its winning streak for the third consecutive session, rising more than 1% to 1.4178, a level not seen since April 2020.
Read more »
USD/CAD Price Forecast: Hovers around 1.4150 after pulling back from multi-year highsUSD/CAD remains tepid for the second successive day, trading around 1.4150 during the European session on Thursday.
Read more »
USD/CAD remains below multi-year highs near 1.4250USD/CAD inches lower after marking a multi-year high of 1.4245 on Friday, trading around 1.4230 during the Asian hours on Monday.
Read more »
USD/CAD refreshes multi-year peak, 1.4200 remains in sight on larger BoC rate cut betsThe USD/CAD pair touches a fresh high since April 2020 during the Asian session on Tuesday, though it lacks follow-through buying and remains below the 1.4200 round-figure mark.
Read more »
USD/CAD reaches fresh multi-year highs near 1.4250 due to Trump tariff threatsUSD/CAD extends its gains for the second successive session, reaching a fresh multi-year high of 1.4239 during Friday's Asian trading hours, the highest level since April 2020.
Read more »
USD/CAD reaches multi-year highs near 1.4300 amid the Canadian political crisisThe US Dollar keeps appreciating against the Canadian Dollar and trades right below 1.4300 for the first time in four years.
Read more »