Canadian Dollar edges higher but remains close to April 2025 lows vs bullish USD
The USD/CAD pair edges lower during the Asian session on Tuesday, though it remains close to the highest level since April 2025, touched last week. Spot prices currently trade around the 1.4270 region as a bullish US Dollar (USD) helps limit the downside.
The USD/CAD exchange rate saw a slight decrease during the Asian trading session on Tuesday, but it stayed near its highest level since April 2025, driven by the strength of the US Dollar. Factors contributing to this include the hawkish stance of the US Federal Reserve, heightened Middle East conflicts, and rising energy prices.
Meanwhile, the Canadian Dollar (CAD) has been lagging due to the Bank of Canada's relatively cautious monetary policy, a weak domestic economy, and trade tensions with the United States. However, a recent boost in crude oil prices is providing some support to the commodity-linked Loonie, tempering speculation of further bullish bets on the USD/CAD pair.
Currency traders may choose to hold off on making decisions until the release of the latest US inflation data, namely the Consumer Price Index (CPI) and Producer Price Index (PPI), on Wednesday and Thursday. Additionally, remarks from Fed Chair Kevin Warsh at the IMF and World Bank annual meetings could further influence the USD and drive the USD/CAD exchange rate.
The USD/CAD pair has been trading within a range established since the beginning of the month, indicating a bullish consolidation period following a strong rally from the September monthly low. For the CAD to continue its upward trajectory, the 1.4300 level must be breached, while a dip below 1.4240 could signal a potential reversal and a new low around 1.4200.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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