USD/CAD Sell-Off Slows After Canada Inflation Data
The Canadian Dollar has outperformed most major currencies in recent weeks, but slowing momentum brings a possible reversal into question.
USD/CAD moved modestly higher today after Canadian inflation came in slightly below expectations, with headline CPI at 2.2% versus 2.3% forecast. The softer print reinforced expectations that the Bank of Canada has room to continue easing in 2026, weighing on the Canadian dollar despite relatively stable crude prices. The US dollar found mild support from defensive positioning and cautious risk sentiment into a data-heavy week.
USD/CAD Daily Price history
USD/CAD rates have continued lower out of the channel that defined price action from mid-June through early-December. However, support may be nearby as the August and September swing lows near 1.3735 linger less than half a percent away. USD/CAD rates have not closed above their 5-day exponential moving average (EMA) since November 24; a break above this trend line would suggest the sell-off has finished.
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