USD/CAD Drops to Around 1.3700 on BoC Rate Steady Expectations and Rising Oil Prices

USD/CAD Falls Near 1.3700 as Investors Anticipate BoC Rate Steadiness and Oil Price Gains

H1: USD/CAD Extends Decline Ahead of Bank of Canada Rate Decision

The USD/CAD pair slipped to around 1.3700 during early Asian trading on Monday, marking its second consecutive day of losses. The Canadian Dollar (CAD) strengthened against the US Dollar (USD) amid expectations that the Bank of Canada (BoC) will keep interest rates unchanged in its upcoming policy meeting on Wednesday.

H2: Strong Canadian GDP Growth Supports BoC Steady Rate Outlook

Canada’s economy grew at a robust 2.2% annualized rate in the first quarter, beating the forecasted 1.7%. The growth was largely driven by increased exports and inventory accumulation as businesses prepare for rising US tariffs. This data underpins market sentiment favoring a steady BoC rate stance.

Learn more on Canada’s economic indicators.

H2: Rising Crude Oil Prices Boost Commodity-Linked Canadian Dollar

The Canadian Dollar also gained strength as West Texas Intermediate (WTI) crude oil prices closed near $62 per barrel. This came despite OPEC+’s decision to increase oil output by 411,000 barrels per day for the third consecutive month — a smaller increase than expected, which eased market concerns.

Canada, as a major oil exporter to the US, sees its currency benefiting from higher oil prices.

Check our Crude Oil Market Updates.

H2: Trade Tensions Add Pressure on US Dollar

Meanwhile, renewed concerns over US tariffs, including President Trump’s plans to raise steel import tariffs to 50%, continue to weigh on the US Dollar. This added pressure contributes to the USD/CAD weakness seen in early trading.

Read our full US Trade War coverage.

Key Takeaways:

• USD/CAD retreats to around 1.3700, extending losses
• Stronger Canadian GDP supports BoC rate hold expectations
• Rising oil prices bolster commodity-linked CAD
• US tariff tensions pressure the USD

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• Bank of Canada Rate Decision Analysis
• How Oil Prices Impact Forex Markets
• US Tariffs and Currency Movements