CAD Holds Near Yesterday’s High Against Soft USD Despite Dovish BoC

CAD Holds Near Yesterday’s High as USD Weakness Supports Momentum

BoC Dovish Hold Meets Market Expectations

The Canadian Dollar (CAD) remains resilient, trading close to yesterday’s high against the US Dollar (USD) after the Bank of Canada (BoC) maintained a dovish hold, which was largely anticipated by investors.

Trade Tensions and Tariff Uncertainty Weigh on Outlook

Policymakers expressed caution due to ongoing uncertainty around US tariffs on steel and aluminium and their potential effects on the Canadian economy. Prime Minister Carney confirmed ongoing “intensive” discussions with the US but emphasized potential retaliatory measures if talks fail.

USD Weakness Bolsters CAD Performance

The persistent weakness in the USD continues to support the Canadian Dollar, which trades well below its estimated fair value of 1.3733. The USD/CAD pair has closed lower for four consecutive months, signaling a rare extended decline for the USD, last seen during the COVID market adjustments in 2020.

Related articles on Tredu.com:

• USD/CAD Technical Analysis & Forecast June 2025
• Impact of US Tariffs on Canadian Economy