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Canadian Dollar remains subdued amid lower oil prices

  • USD/CAD holds firm as commodity-linked Canadian Dollar weakens amid lower oil prices.
  • WTI struggles after Bloomberg reports Donald Trump plans to escort ships via the Strait of Hormuz.
  • Iran proposed a one-month deadline for talks to reopen the Strait of Hormuz and end conflicts in Iran and Lebanon.

USD/CAD inches higher for the second successive day, trading around 1.3590 during the Asian hours on Monday. The pair remains stronger as the commodity-linked Canadian Dollar (CAD) faces challenges amid lower oil prices. West Texas Intermediate (WTI) oil price remains in the negative territory for the third successive day, trading around $98.50 per barrel at the time of writing.

Crude oil prices struggled following a Sunday report by Bloomberg indicating that Donald Trump said the United States will begin guiding neutral ships trapped in the Persian Gulf out through the Strait of Hormuz starting Monday.

However, Ebrahim Azizi, a former commander in Iran’s Islamic Revolutionary Guards Corps (IRGC) and current head of the parliamentary National Security and Foreign Policy Committee, said any US interference in the new maritime regime of the Strait of Hormuz would be considered a violation of the ceasefire. He added that the Strait of Hormuz and the Persian Gulf are not a place for rhetoric.

The upside in USD/CAD may remain limited as the US Dollar (USD) struggles amid easing safe-haven demand, with traders assessing progress in US–Iran peace negotiations. Mediation efforts to end the conflict have continued as the war in Iran enters its third month. Donald Trump hinted that Tehran’s latest peace proposal may fall short of expectations, Bloomberg reported Sunday.

According to Axios, citing sources familiar with the matter, Iran has proposed setting a one-month deadline for talks aimed at reopening the Strait of Hormuz and ending both the US naval blockade and the conflicts in Iran and Lebanon.

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USD/CAD steadies as weekly slide extends on Loonie strength

  • Iran ceasefire talks stalled over the weekend, with the US blockade and the Strait of Hormuz closure both in place.
  • US ISM Manufacturing PMI held at 52.7 in April, missing the 53.0 consensus, while the Prices Paid index surged to 84.6.
  • Canada’s S&P Global Manufacturing PMI jumped to 53.3 in April from 50.0 in March, returning the sector to expansion.

USD/CAD edged higher by less than 0.1% on Friday, recovering from an early-session low near 1.3560 to trade around 1.3590. The pair has shed roughly 0.6% on the week after rolling over from the 1.3700 area mid-week, and momentum has appeared sluggish close to 1.3580 as a cluster of small-bodied candles points to indecision.

The US-Iran conflict and the continued closure of the Strait of Hormuz remain the dominant drivers, keeping crude oil prices elevated and offering tailwinds to the commodity-linked Canadian Dollar. Ceasefire talks stalled over the weekend with both sides hardening their positions, and the US naval blockade of Iranian ports stays in place despite intermittent administration claims of progress that markets have largely discounted.

The US ISM Manufacturing Purchasing Managers Index (PMI) held at 52.7 in April, narrowly missing the 53.0 consensus, while the Employment Index slumped to 46.4 and the Prices Paid component surged to 84.6, the highest reading in over four years. Canada’s S&P Global Manufacturing PMI jumped to 53.3 from 50.0 in March, returning the sector to expansion. Markets now look ahead to next Friday’s heavy calendar, headlined by US Non-Farm Payrolls (NFP), with consensus pointing to 73K versus 178K previously, and Canadian employment data with the unemployment rate seen unchanged at 6.7%.

USD/CAD 5-minute chart

Chart Analysis USD/CAD

Technical Analysis

In the five-minute chart, USD/CAD trades at 1.3587, hovering just above the daily open at 1.3580, which now acts as immediate intraday support. The pair has lost upside momentum after earlier gains, while the downward sloping resistance trend line drawn from 1.3680 continues to cap the broader recovery potential. The latest Stochastic RSI reading has retreated toward lower levels, hinting at fading bullish pressure and keeping the near-term tone broadly neutral while price oscillates around the opening level.

On the downside, a clear break back below the 1.3580 daily open would expose softer intraday levels and suggest that sellers are regaining control in the very short term. On the topside, the next meaningful barrier is the descending resistance line coming from 1.3680, and only a sustained move toward that region and a subsequent break higher would start to undermine the broader corrective bias and open the way for a more convincing upside extension.

In the one-hour chart, USD/CAD trades at 1.3589, holding a mildly bearish near-term tone as it remains capped by a downward-sloping trend-line resistance coming in around 1.3680. The lack of nearby moving averages in the dataset keeps the focus on this structural barrier, while the Stochastic RSI has pushed into elevated territory above 70 recently, hinting that upside attempts could face exhaustion below the mentioned trend line.

On the topside, the immediate obstacle is the descending trend-line resistance at 1.3680, and a sustained break above this level would be needed to ease the current bearish pressure and open the way to a stronger recovery. With no clearly defined intraday supports in the provided data, any pullback from current levels would likely see traders looking to prior session lows and intraday swing points below 1.3589 for initial demand, while an inability to challenge 1.3680 would keep the pair vulnerable to further downside probing.

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USD/CAD – Descending 20-day EMA supports more downside

  • USD/CAD trades cautiously around 1.3580 amid the US Dollar’s underperformance.
  • Investors await Fed speeches for fresh cues on the US interest rate outlook.
  • The BoC opens the door for interest rate hikes amid upside inflation risks.

The USD/CAD pair trades with caution near Thursday’s low at around 1.3580 during the late Asian trading session on Friday. The Loonie pair trades weakly as the US Dollar (USD) is broadly under pressure, following Japanese intervention in the forex markets.

During the press time, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, is marginally higher to near 98.20, but is close to its 10-day low of 98.00.

US Dollar Price This week

The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the weakest against the Japanese Yen.

USDEURGBPJPYCADAUDNZDCHF
USD-0.25%-0.62%-1.43%-0.70%-0.82%-0.45%-0.59%
EUR0.25%-0.35%-1.25%-0.43%-0.55%-0.18%-0.32%
GBP0.62%0.35%-0.88%-0.07%-0.20%0.17%0.03%
JPY1.43%1.25%0.88%0.80%0.66%1.11%0.93%
CAD0.70%0.43%0.07%-0.80%-0.08%0.31%0.11%
AUD0.82%0.55%0.20%-0.66%0.08%0.38%0.24%
NZD0.45%0.18%-0.17%-1.11%-0.31%-0.38%-0.14%
CHF0.59%0.32%-0.03%-0.93%-0.11%-0.24%0.14%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

The next major trigger for the US Dollar will be commentaries from a slew of Federal Reserve (Fed) officials as the blackout period has ended after the monetary policy announcement on Wednesday.

In the policy meeting, the Fed decided to leave interest rates unchanged in the range of 3.50%-3.75%, as expected, with an 8-4 majority. Four members dissented from the hold decision, of which three called for a move away from the easing bias.

Meanwhile, the Canadian Dollar (CAD) outperforms as the Bank of Canada (BoC) warned on Wednesday that interest rates could rise, with energy prices remaining higher.

USD/CAD technical analysis

USD/CAD trades close to Thursday’s low at around 1.3580 at the press time. The pair holds a bearish near-term bias as spot remains capped beneath the 20-day Exponential Moving Average (EMA) at 1.3698 and a Fibonacci-heavy resistance band starting at the 61.8% retracement near 1.3667.

A shift in the Relative Strength Index (14) below 40.00 warrants fresh downside momentum with no oversold signals in sight.

On the downside, the pair could slide towards the March 9 low of 1.3525 and the swing low at 1.3482 if it fails to hold the 78.6% Fibonacci retracement at 1.3585.

On the topside, a recovery would first face resistance at the 61.8% retracement at 1.3667, followed by the 20-day EMA at 1.3698 and the 50% retracement near 1.3725; only a sustained break above this cluster would ease the current bearish tone and open the way toward higher retracement barriers at 1.3782 and 1.3853.

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CAD sits near its highest level since March 11 vs USD amid elevated Oil prices

  • USD/CAD remains depressed as elevated Crude Oil prices continue to underpin the Loonie.
  • The Fed’s hawkish tilt and the US-Iran stalemate support the USD, limiting losses for the pair.
  • Spot prices seem poised to post losses for the fourth week as traders look to the US ISM PMI.

The USD/CAD pair enters a bearish consolidation phase after touching a fresh low since March 11 during the Asian session on Friday, and currently trades around the 1.3575 region. Nevertheless, spot prices remain on track to register losses for the fourth straight week.

Crude Oil prices stall the previous day’s retracement slide from a nearly four-week top amid persistent geopolitical uncertainties due to stalled US-Iran peace talks. In fact, US President Donald Trump rejected an Iranian proposal to open the Strait of Hormuz and lift the blockade, while postponing nuclear issues to a later stage. Trump further said that he’s going to keep Iran under a naval blockade until the regime agrees to a deal that addresses US concerns about its nuclear program.

Moreover, reports suggest that the US is considering new military strikes on Iran, which acts as a tailwind for the black liquid. This, in turn, is seen underpinning the commodity-linked Loonie and capping the USD/CAD pair. Meanwhile, the US Dollar (USD) recovers slightly following the overnight slump to a one-and-a-half week low amid the US-Iran stalemate and the Federal Reserve’s (Fed) hawkish tilt. This offers some support to the currency pair and helps limit the downside.

The Fed’s decision on Wednesday to hold its key policy rate unchanged at 3.50%-3.75% saw three policymakers voting against the accommodative tone in the policy statement. Adding to this, the Advance US GDP report released on Thursday pointed to continued economic resilience, while the US Personal Consumption Expenditures (PCE) Price Index showed that inflation accelerated in March. The data reaffirms bets that the Fed could keep rates unchanged and supports the USD.

Traders, however, are still pricing in a small possibility that the US central bank will lower borrowing costs by the end of this year. The expectations, in turn, hold the USD bulls on the back foot, warranting some caution before positioning for any meaningful recovery for the USD/CAD pair. Traders now look forward to the release of the US ISM Manufacturing PMI for some impetus heading into the weekend.

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USD/CAD edges lower as Oil retreat, Fed-BoC policy split keep volatility elevated

  • USD/CAD trades slightly lower at around 1.3655 after a flat day previously.
  • Declining Oil prices weigh on the Canadian Dollar, although structural support remains.
  • Diverging policy outlooks between the Fed and the BoC keep volatility elevated.

USD/CAD trades around 1.3655 on Thursday, down 0.21% on the day, after stabilizing in the previous day. The pair faces short-term pressure due to a modest pullback in the US Dollar, although downside momentum may remain limited in an uncertain macro environment.

The Canadian Dollar (CAD) shows resilience despite the recent decline in Oil prices, a key driver for the commodity-linked currency. West Texas Intermediate (WTI) is falling after several days of gains, trading around $103 per barrel, which typically weighs on the Loonie given Canada’s position as the largest Crude exporter to the United States (US). However, ongoing geopolitical tensions in the Middle East and potential supply disruptions continue to support the broader outlook for Canada’s energy sector.

On the monetary policy front, the Bank of Canada (BoC) kept its policy rate unchanged at 2.25% and adopted a wait-and-see stance while keeping options open. Governor Tiff Macklem emphasizes a data-dependent approach, noting that no preset path is in place. Inflation is projected slightly higher for 2026 and wage pressures remain persistent, limiting the scope for near-term easing. The central bank also signaled that trade shocks from the United States could justify rate cuts, while sustained energy-driven inflation could require tightening.

On the US side, the US Dollar (USD) corrects lower after two days of gains. The Federal Reserve (Fed) held rates within the 3.5%-3.75% range, with a divided vote reflecting rare internal disagreement. Chair Jerome Powell reiterated that inflation remains elevated, partly due to higher energy prices, reinforcing a broadly hawkish stance.

US Dollar Price Today

The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Canadian Dollar.

USDEURGBPJPYCADAUDNZDCHF
USD-0.26%-0.32%-2.00%-0.21%-0.52%-0.54%-0.67%
EUR0.26%-0.03%-1.69%0.05%-0.25%-0.25%-0.38%
GBP0.32%0.03%-1.62%0.09%-0.20%-0.21%-0.36%
JPY2.00%1.69%1.62%1.70%1.40%1.33%1.22%
CAD0.21%-0.05%-0.09%-1.70%-0.32%-0.35%-0.46%
AUD0.52%0.25%0.20%-1.40%0.32%-0.01%-0.13%
NZD0.54%0.25%0.21%-1.33%0.35%0.00%-0.13%
CHF0.67%0.38%0.36%-1.22%0.46%0.13%0.13%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

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BREAKING: Bank of Canada keeps rates unchanged, USDCAD extends gains

Bank of Canada (BoC) Rate Decision:

  • Actual 2.25%
  • Forecast 2.25%
  • Previous 2.25%

The Bank of Canada maintained its policy interest rate at 2.25%, a level held since October. The Governing Council decided to “look through” the immediate inflationary impact of the Middle East war. However, policy remains “nimble,” with potential for rate hikes if energy price shocks lead to persistent, generalized inflation. Economic projections:

  • Inflation Outlook : March CPI inflation rose to 2.4% from 1.8% in February, driven by surging gasoline prices. Inflation is forecast to peak at 3% in April before returning to the 2% target in early 2027.
  • Economic Growth Projections : GDP growth is projected at 1.2% in 2026, rising to 1.7% by 2028 as trade and investment gradually recover. While consumption and government spending support the economy, US tariffs and trade uncertainty—specifically the CUSMA review—weigh on exports. Canada’s net oil exporter status provides some relative resilience.
  • Labor Market and Risks : The labor market is soft, with unemployment between 6.5% and 7%. Key risks include new US trade restrictions, which could trigger rate cuts, or persistent energy price pressures that might necessitate consecutive rate increases. Productivity is seeing an early boost from businesses adopting artificial intelligence technologies.

Source: xStation5

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USD/CAD – Holds onto gains near 1.3700 in countdown to BoC-Fed policy

  • USD/CAD trades firmly near 1.3700 as the US Dollar gains ahead of the Fed’s monetary policy.
  • The Fed and the BoC are expected to hold interest rates steady.
  • Investors await fresh cues on the US inflation and the interest rate outlook.

The USD/CAD pair clings to Tuesday’s gains around 1.3690 during the European trading session on Wednesday. The Loonie pair reflects strength as the US Dollar (USD) trades higher ahead of the Federal Reserve’s (Fed) monetary policy announcement at 18:00 GMT.

At the press time, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades 0.15% higher to near 98.75.

Investors expect the Fed to leave interest rates unchanged in the range of 3.50%-3.75%, as elevated energy prices have de-anchored inflation projections globally. Market participants will pay close attention to the monetary policy statement and Fed Chair Jerome Powell’s speech to get fresh cues on inflation and the United States (US) interest rate outlook.

Ahead of the Fed’s policy, the Bank of Canada (BoC) will announce its monetary policy at 13:45 GMT, in which it is also expected to hold interest rates steady. Market participants will closely monitor remarks regarding the Canadian labor market outlook, with the Unemployment Rate remaining higher at 6.7%.

USD/CAD technical analysis

USD/CAD reflects strength at around 1.3690 as of writing. However, the price keeps a mildly bearish near-term tone as it remains below the 20-period Exponential Moving Average (EMA) at 1.3724.

The Relative Strength Index (RSI) near 44 suggests fading bullish momentum and hints that sellers are gaining incremental control while price remains capped by the overhead EMA.

On the topside, immediate resistance aligns with the 20-period EMA at 1.3724, and a daily close above this barrier would be needed to ease the current downside bias and reopen a push toward 1.3800. Looking down, initial support is seen at the former trend-line-based floor near 1.3593; a sustained break below that area would reinforce the developing bearish phase.

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Canadian Dollar consolidates vs USD as traders keenly await BoC/FOMC rate decisions

  • USD/CAD struggles to capitalize on the overnight recovery gains amid a combination of diverging forces.
  • The US-Iran statement benefits the safe-haven USD, while bullish Crude Oil prices underpin the Loonie.
  • Traders also seem reluctant and opt to move to the sidelines ahead of the crucial BoC/FOMC decisions.

The USD/CAD pair seesaws between tepid gains/minor losses, below the 1.3700 mark, during the Asian session on Wednesday amid a combination of diverging forces. The lack of progress in US-Iran peace talks continues to benefit the US Dollar’s (USD) reserve currency status and supports spot prices. However, bullish Crude Oil prices underpin the commodity-linked Loonie and cap the upside for the currency pair.

Hopes for a revival of US-Iran peace talks receded after US President Donald Trump canceled his special envoy’s planned visit to Pakistan. Furthermore, media reports suggest that Trump was dissatisfied with Iran’s new proposal on resolving the war and reopening the strategic waterway, but would set ‌aside discussion of Iran’s nuclear program. This keeps geopolitical risks in play and continues to benefit the safe-haven USD, which, in turn, is seen as a key factor acting as a tailwind for the USD/CAD pair.

Meanwhile, shipping traffic through the Strait of Hormuz remains blocked due to Iran’s restrictions on movements and the US naval blockade of Iranian ports. Adding to this, the Wall Street Journal reported that Trump has instructed aides to prepare for an extended blockade of Iran, aimed at forcing Tehran to dismantle its entire nuclear program. This keeps Crude Oil prices elevated near the highest level in over two weeks and keeps a lid on any meaningful appreciating move for the USD/CAD pair.

Traders also seem reluctant to place aggressive directional bets and opt to wait on the sidelines ahead of key central bank events. The Bank of Canada (BoC) will announce its policy decision later during the North American session, and will be followed by the outcome of a two-day FOMC meeting. Market participants will look for fresh cues about the central banks’ future policy path, which, in turn, should provide a fresh impetus to the USD/CAD pair and determine the next leg of a directional move.