- The USD/CAD has dipped close to 1.3720, with the US dollar experiencing a significant downturn.
- The US president is once again hinting at the possibility of firing Fed Chairman Powell.
- Concerns about inflation, which are pegged against the BOC’s 2% target, may lead to interest rate cuts.
During the Asian trading session on Thursday, the USD/CAD pair dropped to around 1.3718. Although the Rooney Pair is slightly down, the US Dollar (USD) is seeing a sharp decline. President Donald Trump is once again suggesting a potential dismissal of Federal Reserve Chairman Jerome Powell, which could also impact the Canadian Dollar (CAD).
The USD Index (DXY), which tracks the dollar’s performance against six major currencies, has hit a three-year low at approximately 97.25.
Trump’s comments during a Senate hearing where Powell noted the Fed could take its time adjusting policies, seemed to trigger this firing thought. Powell had expressed some caution on whether tariffs might lead to inflation more or less than expected.
Meanwhile, the Canadian dollar is facing pressure as the Bank of Canada (BOC) eyes its 2% inflation target, raising hopes for future rate cuts. Recent data showed that the consumer price index (CPI) increased by 1.7% year-over-year, while the BOC’s core CPI rose steadily to 2.5%.
Currently, USD/CAD trades near its 20-day EMA around 1.3717, suggesting a sideways trend. The 14-day RSI is fluctuating within a range of 40.00 to 60.00, indicating a potential change in volatility.
If the pair breaks above the May 29 high of 1.3820, it could open doors to further highs of 1.3920 by May 21 and possibly 1.4000 by May 15. Conversely, there’s a chance the assets could slide towards psychological support levels at 1.3500 and 1.3420 on September 25.
USD/CAD Daily Chart
The table below details the change in the Canadian Dollar (CAD) relative to other major currencies, revealing it is currently weakest against the British pound.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.17% | -0.32% | -0.22% | -0.06% | -0.20% | -0.13% | -0.10% | |
| EUR | 0.17% | -0.09% | -0.12% | 0.14% | 0.01% | 0.04% | 0.10% | |
| GBP | 0.32% | 0.09% | 0.00% | 0.23% | 0.11% | 0.16% | 0.19% | |
| JPY | 0.22% | 0.12% | 0.00% | 0.20% | 0.07% | 0.09% | 0.16% | |
| CAD | 0.06% | -0.14% | -0.23% | -0.20% | -0.12% | -0.17% | -0.04% | |
| AUD | 0.20% | -0.01% | -0.11% | -0.07% | 0.12% | -0.04% | 0.08% | |
| NZD | 0.13% | -0.04% | -0.16% | -0.09% | 0.17% | 0.04% | 0.12% | |
| CHF | 0.10% | -0.10% | -0.19% | -0.16% | 0.04% | -0.08% | -0.12% |
The accompanying heatmap displays the rate of change for each major currency relative to one another, with the base currency from the left and the quote currency from the top. For instance, if you select Canadian dollars from the left and move across to US dollars, the percentage reflects the change in value of CAD against USD.
