- The Canadian dollar stumbled on Friday when tariff fears remain.
- Canadian job data forecasts, strengthening Loon.
- Fresh tariff threats from Donald Trump attracted CAD profits.
The Canadian dollar (CAD) tested on Friday the lower land in relation to the US dollar (USD), shedding weight despite Canadian data data regarding the work force data, which exceeded the median market forecasts according to a significant meeting of the rate at the rate, withdrawing the fears of deterioration of the economic situation.
By adding further fuel to risk fires, which its administration started this week, US President Donald Trump announced the next round of tariff threats against Canada, if the country does not provide a satisfactory trade agreement before August 1. The recent tariffs are to enter into force the same day, when the “mutual” tariffs, announced in April, are to start after Trump himself twice.
Daily Digest Market Movers: Liono gains on a lowered BOC foot, but the commercial risk remains in the foreground
- The Canadian dollar briefly tested the recent two -week minima compared to the American dollar despite better than expected data from work.
- The latest tariff add -ons of President Trump regarding Canadian goods kidnap market moods through the throat, because commercial tensions burden investors and business operators.
- Canada added 83.1 thousand Net net in June, much above the expected 0.0k.
- The Canadian unemployment rate also dropped to 6.9% compared to the expected escalate to 7.1%.
- Because Canadian employment data overcome the street, rate markets value less than one in five opportunities to reduce the rate of a quarter point from BOC this month.
- Donald Trump claims that Canadian goods can be in the face of an additional 35% import tax from August 1, if Canada does not meet Trump where he wants on trade, which seems to be a still moving goal.
The price of the Canadian dollar price
The Canadian Dollar still has problems with maintaining their nearest profits, and the USD/CAD pair is suspended along the growing consolidation zone just below the handle 1.3700. The ongoing weakness of CAD or USD strength is able to push Loon into the fresh fight of recent low. USD/CAD tests water just above the continuous trend lines down from many decaded peaks previously set in 2025, and counterattack flows can swipe in full reversal, if USD bulls continue to escalate the greenbacks against the weakening CAD.
Daily USD/CAD chart
Canadian Dollar Faq
The key factors that drive the Canadian dollar (CAD) are the level of interest rates set by Bank of Canada (BOC), oil price, the largest Canada export, economy health, inflation and commercial balance, which is the difference between the value of Canada exports compared to its import. Other factors include market moods-notterlessly from whether investors take more risky assets (risk), or are looking for safe and sound havens (risk)-risk that is positive. As the largest commercial partner, the health of the American economy is also a key factor affecting the Canadian dollar.
Bank of Canada (BOC) has a significant impact on the Canadian dollar, determining the level of interest rates that banks can borrow. This affects the level of interest rates for everyone. The main goal of BOC is to maintain inflation of 1-3% by adjusting interest rates up or down. Relatively higher interest rates are usually positive for CAD. Bank of Canada can also exploit quantitative alleviation and tightening to affect credit conditions, with former negative CAD and the second positive.
The price of oil is a key factor affecting the value of the Canadian dollar. Petroleum is the largest Canada export, so the price of oil tends to immediately affect the value of CAD. Basically, if the oil price also increases CAD, as the number of demand for currency increases. Otherwise, the price of oil will drop. Higher oil prices usually cause a greater probability of a positive trade balance, which also supports CAD.
While inflation has always been traditionally considered a negative factor of currency, because it reduces the value of money, on the contrary it was in newfangled times with relaxation of cross -border capital control. Higher inflation tends to run central banks to determine interest rates, which attracts greater capital revenues of global investors looking for a lucrative place to maintain money. This increases the demand for the local currency, which in the Canadian case is the Canadian dollar.
Macroeconomic data release the health of the economy and may affect the Canadian dollar. Indicators such as GDP, PMI production and services, surveys on employment and consumer moods can affect the direction of CAD. A mighty economy is good for the Canadian dollar. It not only attracts more foreign investment, but can encourage Bank Canada to set interest rates, which leads to a stronger currency. However, if economic data is frail, the CAD will probably fall.
