Created
: 2025.08.22
- English
- English
- What's Myforex
- Share
- Use tools
- Get information
- What's New
- Help center
- About us
- Customer support
- Terms and policies
-
-
PortfolioShare your portfolio and performance in real time -
Events & contestsEvents and contests held by retail brokers around the world
-
-
Real-time spread comparisonCompare spreads of major retail brokers in real time -
Volatility analysisVisualize volatility as a measure of daily market activity -
Swap point comparisonCompare buy and sell swap values for each broker by symbol -
Market rates & chartsCheck prices for all instruments offered by each broker -
IndicatorsProviding in-house developed indicators for MT4/MT5 -
Trading calculatorsCalculation tools for each broker to help you trade
-
-
World FX newsLatest news on forex and cryptocurrencies from around the world -
Broker informationTrading information of retail brokers worldwide -
MetaTrader4/5 user guideUser guide collection for the latest MetaTrader4/5 -
Economic calendarRelease calendar for indicators from official sources of major economies
USD/CAD softens to near 1.3900 ahead of Powell's Jackson Hole speech
World FX news
Breaking news
USD/CAD softens to near 1.3900 ahead of Powell's Jackson Hole speech
New
2025.08.22 08:20
2025.08.22 08:20
2025.08.22 08:20
- USD/CAD weakens to around 1.3905 in Friday's early Asian session.
- Flash US S&P Global Manufacturing PMI surprises to the upside in August.
- A recovery in crude oil prices lifts the commodity-linked Loonie.
The USD/CAD pair loses traction to near 1.3905, snapping the three-day winning streak during the early Asian session on Friday. A rebound in crude oil prices provides some support to the commodity-linked Loonie. All eyes will be on the key speech by Federal Reserve (Fed) Chair Jerome Powell at the Jackson Hole Symposium later on Friday.
The preliminary reading on S&P Global's Composite PMI showed on Thursday that US business activity picked up pace in August, with the index at 55.4 versus 55.1 prior. Meanwhile, the US Manufacturing PMI rose to 53.3 in August from 49.8 in July, above the market consensus of 49.5. Services PMI eased to 55.4 in August from 55.7 in the previous reading, but was stronger than the 54.2 expected.
The upbeat US S&P Global PMI reports fail to boost the Greenback as traders continue to price in a rate cut in the Fed's September meeting. According to the CME FedWatch tool, Fed funds futures traders are now pricing in a 74% chance of a rate reduction next month, down from 82% on Wednesday. They are also pricing in 49 basis points (bps) of cuts by year-end, down from 54 bps.
Meanwhile, a recovery in crude oil prices underpins the commodity-linked Loonie. It's worth noting that Canada is the largest oil exporter to the US, and higher crude oil prices tend to have a positive impact on the CAD value.
On the other hand, traders ramp up their bets that the Bank of Canada (BoC) would deliver a rate reduction at the next policy decision in September after Canadian Consumer Price Index (CPI) inflation data. This, in turn, could weigh on the Canadian Dollar and create a tailwind for the pair.
Canadian Dollar FAQs
The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada's largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada's exports versus its imports. Other factors include market sentiment - whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) - with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar.
The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive.
The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada's biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD.
While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada's case is the Canadian Dollar.
Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.
Last updated
: 2025.08.22
Related articles
GBP/USD catches fresh bids on renewed US Dollar selling pressure
48 minutes agoUS to push G7 to impose high tariffs on China, India over Russian oil purchases -- FT
54 minutes agoUSD/JPY softens to near 147.00 as Fed rate cut bets stay firm
2025.09.12 08:07AUD/USD touches new ten-month high as Greenback easing continues
2025.09.12 08:05EUR/USD recovers 1.1700 as US CPI and jobless claims weigh on US Dollar
2025.09.12 07:17USD/CHF eases as Greenback declines amid Fed rate cut expectations
2025.09.12 05:32
FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.
Was this article helpful?
We hope you find this article useful. Any comments or suggestions will be greatly appreciated.
We are also looking for writers with extensive experience in forex and crypto to join us.
please contact us at [email protected].
Thank you for your feedback.
Thank you for your feedback.
Most viewed
Gold Price Forecast: XAU/USD edges lower below $3,650 on profit-taking
The Gold price (XAU/USD) edges lower to around $3,630 during the early Asian session on Friday. The precious metal retreats from a record high on some profit-taking. Nonetheless, the rising bets of the US Federal Reserve (Fed) rate cut in the upcoming meeting might cap its downside.
New
2025.09.12 09:14GBP/USD catches fresh bids on renewed US Dollar selling pressure
GBP/USD rallied over one-third of one percent on Thursday, bolstered by fresh US Dollar (USD) weakness as investors pile into bets that the Federal Reserve (Fed) will finally be pushed into a series of interest rate cuts through the rest of the year.
New
2025.09.12 08:27US to push G7 to impose high tariffs on China, India over Russian oil purchases -- FT
The United States (US) plans to urge Group of Seven (G7) nations to hit India and China with sharply higher tariffs for buying Russian oil in an attempt to force Moscow into peace talks with Ukraine, the Financial Times (FT) reported on Thursday.
New
2025.09.12 08:21USD/JPY softens to near 147.00 as Fed rate cut bets stay firm
The USD/JPY pair attracts some sellers near 147.15 during the early Asian session on Friday. The US Dollar (USD) remains weak against the Japanese Yen (JPY) as US inflation reports support the case for the first interest rate cut by the Federal Reserve (Fed) since December 2024.
New
2025.09.12 08:07AUD/USD touches new ten-month high as Greenback easing continues
AUD/USD knocked into another new ten-month peak on Thursday, clocking in an intraday peak above 0.6650 for the first time since last November.
New
2025.09.12 08:05EUR/USD recovers 1.1700 as US CPI and jobless claims weigh on US Dollar
EUR/USD advances during the North American session after the European Central Bank decided to hold rates unchanged, while the Greenback weakened after the Consumer Price Index (CPI) report was aligned with estimates. At the time of writing, the pair trades at 1.1733 up by 0.34%.
New
2025.09.12 07:17USD/CHF eases as Greenback declines amid Fed rate cut expectations
USD/CHF chalked in a technical rejection of the 0.8000 handle on Thursday, with the US Dollar (USD) taking a beating across the board.
New
2025.09.12 05:32Donald Trump asks higher court to wave off order allowing Cook to remain at Fed
United States (US) President Donald Trump and his administration have formally asked the federal appeals court to pause a federal order that would allow Lisa Cook to remain at her post at the Federal Reserve (Fed) pending an official probe into accusations of mortgage fraud.
New
2025.09.12 04:42Forex Today: Greenlight for a Fed cut, UK GDP in focus
Inflation prints in the producer and the consumer side in the US further cemented the case for the first interest rate cut by the Federal Reserve, since December 2024.
New
2025.09.12 04:30NZD/USD climbs to near one-month high as Greenback weakens after US CPI data
The New Zealand Dollar (NZD) edges higher against the US Dollar (USD) on Thursday, with NZD/USD extending gains for the second straight session after reversing earlier losses as the Greenback softened in the wake of the latest US inflation release.
New
2025.09.12 03:27Disclaimer:
All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.
The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.
Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy
