Forex Trading Tools and Services

Currencies

USD/CAD Rises on Fed Cook’s Sacking, Eliciting Dollar Sentiment, Investors Await Canada GDP and Trade Negotiations

  • BY
  • August 27, 2025
  • 0 Comments

The USD/CAD currency pair rose to about 1.3850 during Wednesday’s late Asian trading following the US Dollar’s appreciation even as the Federal Reserve faced political uncertainty after President Donald Trump sacked Fed Governor Lisa Cook, who has threatened to contest the move in the courts legally. Anxiety regarding the integrity of US institutions has burdened the Greenback, with Canadian Dollar traders looking to clarity from the forthcoming US-Canada trade talks and this Friday’s release of Canada’s Q2 GDP figures to guide the Loonie’s short-term direction. KEY LOOKOUTS • Political tensions escalate following President Trump’s sacking of Fed Governor Lisa Cook, raising questions regarding the integrity of US financial institutions. • Cook’s move to sue over her firing puts additional pressure on the stability of the US Dollar. • Investors watch closely for Canadian official-US counterpart talks for possible trade concessions. • Canadian GDP and June and Q2 figures, to be released Friday, are predicted to give the Canadian Dollar new direction. USD/CAD currency pair edged up near 1.3850 on Wednesday as the US Dollar slightly benefited despite political unrest over the Federal Reserve. The confidence of the Greenback in the market has been rattled following President Trump’s sudden removal of Fed Governor Lisa Cook, leading her to seek legal recourse over the move. The political drama has left US institutions’ credibility in question, with investors now being cautious. In the meantime, the Canadian Dollar moves sideways as markets wait for developments on US-Canada trade negotiations and the release of Canada’s Q2 GDP figures, both of which are expected to shape the Loonie’s next direction. USD/CAD hovers around 1.3850 as the US Dollar resists despite Fed uncertainty following Governor Lisa Cook’s removal. Market players remain on hold until US-Canada trade talks and Canada’s Q2 GDP release later Friday. • USD/CAD ticks higher to about 1.3850 in Wednesday late Asian dealing. • US Dollar rises modestly with the DXY at 98.35 amid political uncertainty. • President Trump’s firing of Fed Governor Lisa Cook creates institutional credibility issues. • Lisa Cook will sue to overturn her firing, ratcheting up political tensions. • Market sentiment is still wary of US financial decision-making stability. • Canadian Dollar moves horizontally as investors wait for updates on US-Canada trade negotiations. • Canada’s Q2 and June GDP figures, released Friday, may take direction of the Loonie. The USD/CAD currency pair has witnessed small increases as political instability in the US continues to take its toll on investor morale. The abrupt firing of Fed Governor Lisa Cook by President Donald Trump is making the credibility and stability of US financial institutions questionable. Faced with this, Cook has announced intentions to pursue a lawsuit against her termination, putting more pressure on the market. In spite of this, the US Dollar has remained relatively strong, indicating careful optimism in investors. USD/CAD DAILY PRICE CHART SOURCE: TradingView On the Canadian side, the spotlight is on future trade talks with the United States and local economic indicators. Canadian government representatives, such as cabinet minister Dominic LeBlanc, have been in talks with American counterparts in order to obtain trade concessions, which have indicated movement toward a possible deal. In the meantime, investors are setting their sights for the announcement of Canada’s Q2 GDP figures, which should give guidance regarding the nation’s economic performance and determine the near-term direction of the Canadian Dollar. TECHNICAL ANALYSIS USD/CAD trades at 1.3850, with a light positive bias as the pair tests short-term resistance. The US Dollar Index (DXY) trading around 98.35 facilitates the Loonie pair’s small gains, while major moving averages indicate minimal momentum in either direction. The first support is expected near 1.3800, with the first resistance around 1.3900, pointing towards a likely consolidation phase till the big economic or political drivers spark a conclusive breakout. Traders can seek validation from trend and volume indicators before taking a directional view. FORECAST In the near term, USD/CAD could experience modest upside to the 1.3900 level if the US Dollar continues to find itself supported in the face of geopolitical uncertainty. Positive news in the US-Canada trade negotiations or a stronger-than-projected US economic outlook can further support the pair, prompting prudent bullish sentiments from traders. Alternatively, the pair is likely to experience downward pressure if doubts about the credibility of the US Federal Reserve grow or if Canada’s Q2 GDP figures are better than projected, a prospect that would boost the Loonie. Significant support of the order of 1.3800 would be tested under such circumstances, with further slides likely should broader market risk perception turn against the Canadian Currency.

Read More
Currencies

USD/CAD Falls as US Recession Jitters and Trade Tensions Drag on the Dollar

  • BY
  • April 14, 2025
  • 0 Comments

The USD/CAD currency pair continued its downward trend on Monday, falling towards 1.3850 as market mood turned bearish amid heightening fears of an impending US recession and persistent inflation. The US Dollar faced further pressure from renewed trade tensions between the US and China, following both countries’ announcements of severe tariffs increases that boosted fears of a global slowdown. Despite the announcement of a temporary truce, uncertainty in the market remains elevated. Meanwhile, the Canadian Dollar is deriving some strength from capital flows relocating from US assets, albeit its gains are limited by modest crude Oil prices, as continued concerns surrounding reduced global demand drag on the commodity-sensitive currency. KEY LOOKOUTS • Traders will keep a close eye on future US economic data, such as retail sales and jobless claims, for additional indications of recession risk and inflationary trends. • Any news or change in trade talks after the 90-day tariff ceasefire between China and the US could have a major impact on market sentiment and the USD/CAD currency pair. • The Canadian Dollar’s strength continues to be dependent on crude oil performance; any significant changes in international oil demand or supply would affect the direction of CAD. • Market participants will pay close attention to Fed officials’ statements for hints about future interest rate actions, particularly against the backdrop of escalating recession and inflation fears. In the coming days and weeks, market focus will be on a few key factors guiding the USD/CAD pair. Coming US economic indicators, particularly retail spending and jobless claims, will provide new information on recession threats and inflation expectations. Progress in the current US-China trade war will be another prime driver of sentiment, with the new 90-day tariff ceasefire providing little more than short-term respite. In the meantime, the Canadian Dollar’s resilience may be challenged by price action in crude Oil, which remains susceptible to fears about global growth. In addition, Federal Reserve policymakers’ comments in the days ahead could give added guidance on direction of future rate policy as economies continue to confront uncertainty. Traders will continue to monitor US economic statistics and the unfolding US-China trade tension for new direction in markets. The Canadian Dollar’s resilience is also dependent upon Oil price stability, and comments from the Fed could influence subsequent USD sentiment. •   USD/CAD continues to fall, coming close to 1.3850, amidst rising US recession fears and recalcitrant inflation. •    Increased US-China trade tensions instill risk aversion and additional pressure on the US Dollar. •    China’s steeply rising tariffs on US imports incite concerns about global economic slowdown. •   Poor US consumer sentiment and soft labor market data exacerbate investor nervousness. •   A short-term 90-day ceasefire between the US and China provides only limited relief in markets. •   Canadian Dollar draws strength from capital inflows despite muted crude Oil prices. •   Oil prices continue to face downward pressure, capping CAD strength as global growth concerns continue. Sentiment among investors has been greatly swayed by increased worry about the health of the US economy as recession and long-term inflationary fears continue to dominate market dialogue. The sense of uncertainty has been heightened following a sudden flare-up in the trade tensions between China and the United States after both nations increased tariffs on products from the other side. This has raised new concerns regarding the effect on worldwide growth and overall business sentiment, particularly following recent economic indicators to suggest softening consumer confidence and mixed messages from the labor market. CAD/USD DAILY PRICE CHART CHART SOURCE: TradingView Meanwhile, the Canadian Dollar has attracted some support as investors look for alternatives to the US Dollar amidst the uncertain economic environment. Still, there are challenges in the Canadian economy, mainly from muted Oil prices, which continue to be pressured by fears that if trade tensions continue, global demand might slow down. As markets wait for more news on trade talks and economic indicators, attention is fixed on how these wider risks will influence financial stability in the coming weeks. TECHNICAL ANALYSIS USD/CAD continues to exhibit bearish momentum as the pair extends its losing trend for the fourth session in a row. The price is still below crucial moving averages, which confirms persistent selling pressure. Unless the pair holds above the 1.3850 support area, it may create room for additional downside movement in the short term. Conversely, any recovery effort is bound to encounter resistance at the 1.3920–1.3950 level, as sellers are likely to return. In general, the technical configuration points towards prudence as the market awaits new drivers to dictate the next direction. FORECAST If optimism returns to the markets and the tensions over trade between the US and China relent, USD/CAD may recover in the near term. A recovery in US economic statistics or any indication of positive developments in talks may propel the US Dollar stronger, and the pair might again head toward resistance levels at 1.3920, possibly 1.3950. A pick-up in Oil prices or optimistic risk appetite also might support the Canadian Dollar along with overall market stability, giving rise to price fluctuations on the short-term in a balanced range. To its detriment, however, if recession concerns intensify and US economic reports continue to dismay, the USD/CAD exchange rate would continue to be under selling pressure. Falling through the 1.3850 support level may provoke further losses, leaving the pair vulnerable to the next psychological handle at 1.3800 or lower. Ongoing trade tensions, coupled with softer US consumer attitudes and inflation worries, would be expected to strengthen bearish momentum in the near term, curbing any significant attempts at recovery.

Read More