The USD/CAD pair finished the trading week (Monday–Friday) on a stronger footing, ending close to the 1.38 level. The move reflects a combination of steady US dollar demand and a relatively subdued Canadian dollar, as investors weighed macroeconomic signals from North America against a backdrop of stabilizing global markets.

Weekly Price Action and Market Dynamics

Throughout the week, USD/CAD traded within a relatively narrow but upward-sloping range, with the pair oscillating between approximately 1.375 and 1.380. Early-week weakness gave way to gradual dollar strength, culminating in a late-week push toward the upper end of the range. This price action suggests a market that remains cautious but biased toward the US dollar, particularly as volatility stayed contained and risk assets showed mixed performance.
From a technical perspective, the pair’s ability to hold above recent support levels reinforced the view that downside momentum in USD/CAD has weakened. While the move was not aggressive, the consistency of higher lows during the week indicates ongoing demand for dollar exposure, especially among institutional participants managing currency risk.

Macro Factors Supporting the US Dollar

The US dollar’s weekly strength against the Canadian dollar was largely underpinned by expectations that the US Federal Reserve will maintain a relatively restrictive stance for longer than some peers. Even as inflation has moderated, US economic data continues to point to resilience in consumption and labor markets, supporting higher yield expectations and sustaining demand for the greenback.
For global investors, this dynamic reinforces the dollar’s role as both a yield and stability anchor. In foreign exchange markets, this has translated into selective dollar buying rather than broad-based rallies, with USD/CAD benefiting as the Canadian dollar struggled to find strong domestic catalysts.

Canadian Dollar Pressured by Growth and Commodity Signals

On the Canadian side, the loonie faced headwinds from mixed economic indicators and uneven performance in commodity markets. While energy prices remained relatively stable, they did not provide a strong enough tailwind to materially lift the Canadian dollar. Additionally, lingering concerns about domestic growth momentum and household sensitivity to interest rates kept expectations around Canadian monetary policy cautious.
For Israeli and global investors with exposure to North American assets, the USD/CAD movement highlights the importance of macro divergence. A stable US outlook versus a more uncertain Canadian trajectory has made the currency pair increasingly sensitive to incremental data surprises rather than broad thematic shifts.
Looking ahead, market participants will closely monitor upcoming US inflation data, signals from central bank officials, and developments in global risk sentiment. Any renewed volatility in commodities or shifts in interest rate expectations could quickly alter the balance. For now, the outlook suggests that USD/CAD may remain supported near current levels, with risks tilted toward further strength if US economic resilience continues to outperform expectations.