Photo by Michelle Spollen on Unsplash

The Canadian Dollar (CAD) caught a huge boost from market-wide Greenback weakness on Friday. The Loonie climbed over a full percent against the waffling US Dollar (USD) following a fresh batch of eerily-familiar-looking tariff threats from United States (US) President Donald Trump.

Canadian economic data has been strictly mid-tier for most of this trading week, leaving the Loonie at the mercy of broader investment sentiment. Next week will also kick off with a notably thin note: US markets will be closed for an extended weekend, and there is little of note on either side of the data docket next week until Friday’s US Personal Consumption Expenditures Price Index (PCE) inflation print.

Daily digest market movers: Canadian Dollar traders take full advantage of Greenback weakness

• The Canadian Dollar tested into its highest bids against the US Dollar on Friday, pushing the USD/CAD pair into 1.3720.
• US President Donald Trump wants to tariff individual tech companies that don’t pivot their entire business model to producing their goods in the US, despite their entire production cycle being built around profit margins from importing goods from countries with lower wages.
• President Trump also returned to ‘recommending’ an across-the-board 50% tariff on goods imported from the European Union (EU) in a repeat of identical tariff threats that Trump had already backed down from in the first quarter.
• US markets will be shuttered on Monday for the Memorial Day long weekend, crimping market flows early next week.
• US PCE inflation will be the key print next week, but major inflation metrics are still missing possible fallout from tariffs.

Canadian Dollar price forecast

The Canadian Dollar is now testing into seven-month highs against the US Dollar, pushing into its best bids against the Greenback since last October. The Loonie is rushing to fill the void left by weakening US Dollar pressure, sending USD/CAD down toward the 1.3700 handle.

USD/CAD has declined for five consecutive trading sessions as Greenback selling picks up the pace. The pair is staring down a technical rejection of the 200-day Exponential Moving Average (EMA) near 1.4020, however too steep of a drop too quickly has snapped technical oscillators into oversold territory, implying a bounce could be on the cards.

USD/CAD daily chart

(Click on image to enlarge)

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