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• The Canadian dollar gained another 0.66% on Friday.
• Market flows reversed out of the greenback, which pushed Canadian dollar bids higher.
• The Bank of Canada's rate call is due next week. Markets must now wait to see if the BoC will continue to deliver last-minute rate cuts.

The Canadian dollar rose on Friday. It jumped two-thirds of a percent against the US dollar as global market flows continued to reverse out of the safe haven greenback.

Trade war pressures were relieved somewhat after the Trump administration pivoted away from its own lopsided, “reciprocal” tariffs following a last-minute 90-day delay, opting for a 10% across-the-board replacement tariff. Coupled with 145% import fees on all goods from China, trade war tensions will keep investors watching geopolitical headlines for the foreseeable future.

The Bank of Canada is set to deliver its latest rate call next week, and key Canadian Consumer Price Index (CPI) inflation figures are also due next Tuesday. The pressure is on for the BoC as markets await to see if they will hold off on rate changes for the time being after a long-run series of rate cuts, or if BoC Governor Tiff Macklem will try to squeeze one more rate slash in before economic impacts from US tariffs begin to take hold on the Canadian economy.

Market Movers: Canadian Dollar Climbed on Greenback Weakness

• The Canadian dollar rose to a 22-week high against the US dollar on Friday.
• Tariff and trade war tensions have remained elevated, but markets will likely continue to tilt back into risk appetite regardless.
• Key US data showed a further decline in US Producer Price Index (PPI) inflation in March, but tariffs could cut that progress short.
• US consumer sentiment figures have collapsed, and US consumers expect both near-term and long-term inflation to soar, also thanks to tariffs.
• Canadian CPI inflation is due next Tuesday, which could inform the BoC’s next rate call, slated for next Wednesday.

Canadian Dollar Price Forecast

The Canadian dollar’s 0.66% gain on Friday dragged the USD/CAD currency cross to a weekly loss of 2.3% and accelerated the pair into its fifth-straight, week-on-week loss, as the Loonie was bolstered by a general weakening in the greenback's market demand. The USD/CAD pair smashed through the 200-day Exponential Moving Average (EMA) at the 1.4072 mark, which may have put the pair in position for extended declines.

On the bullish side, technical oscillators appeared to be flashing oversold warning signs on the USD/CAD currency cross as the pair explored multi-month lows below the 1.3900 handle. Price action may be at risk of running aground on old technical swing points priced in between the levels of 1.3800 and 1.3900 seen through the two middle quarters of 2024.

USD/CAD Daily Chart

(Click on image to enlarge) 

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