USD/CAD Forecast: BoC, CPI & Trade Risks
- The Canadian dollar is trading at 1.3653 against the U.S.
- The first quarter of 2025 saw a 2.2% year-over-year gain, largely driven by exports as U.S.
- Cracks are appearing in the Canadian economy, including sluggish consumer spending, rising unemployment, and uncertainty surrounding trade relations with the U.S., its largest trading partner.
The Canadian dollar rallies against the U.S. dollar, fueled by increased risk appetite in the markets.Discover how a 0.10% increase is impacting the USD/CAD exchange rate today, June 27, 2025.With Canada’s GDP growth expected, and the bank of Canada (BoC) holding steady on interest rates, the market navigates crucial decisions. The report highlights the effects of potential counter-tariffs and sluggish consumer spending, impacting the Canadian economy. The U.S. Core PCE Price Index also takes center stage. News Directory 3 keeps you informed on the technical levels of resistance and support, providing insights into what’s next for this currency pair. Discover what’s next for the BoC’s policy and those crucial inflation numbers!
Canadian Dollar Gains as Markets Eye GDP, Inflation Data
The Canadian dollar is trading at 1.3653 against the U.S. dollar, a 0.10% increase. the loonie has benefited from increased risk appetite, gaining 5% against the greenback as April 1. This follows a strong performance Thursday, where it saw its best daily gain in a month, up 0.63%.
Canada’s GDP is expected to show a slight increase of 0.1%. The first quarter of 2025 saw a 2.2% year-over-year gain, largely driven by exports as U.S. companies accelerated purchases before tariffs took affect in April.However, domestic demand remains weak, and Canadian counter-tariffs could further dampen it by making U.S. products more expensive.
Cracks are appearing in the Canadian economy, including sluggish consumer spending, rising unemployment, and uncertainty surrounding trade relations with the U.S., its largest trading partner.
The Bank of Canada (BoC) held steady on interest rates at its June meeting,addressing these concerns.The next meeting is july 30. Economists anticipate the BoC will maintain its current stance unless the economic outlook improves significantly.
Inflation is also a key factor for the BoC.The June inflation report showed inflation unchanged at 1.7%, below the BoC’s 2% target. A lower July inflation reading could pressure the BoC to act.
In the U.S.,the Core PCE Price Index,the Federal Reserve’s preferred inflation gauge,is expected to rise to 2.6% year-over-year for May, compared to 2.5% the previous month. the monthly index is projected to remain steady at 0.1%.
USD/CAD Technical Levels
- The USD/CAD pair has surpassed resistance at 1.3652 and is testing resistance at 1.3662. The next resistance level is 1.3674.
- Support levels are at 1.3640 and 1.3630.
What’s next
Traders will be closely watching the upcoming GDP data and inflation reports from both Canada and the U.S. These figures will likely influence the Bank of canada’s next policy decision and impact the USD/CAD exchange rate.