USD/CAD has been one of the most volatile G10 pairs this week, falling 0.63% as softer US inflation data weakened the dollar.
G10 performance
• AUDUSD: 0.69720, +0.82%
• EURUSD: 1.14183, +0.36%
• GBPUSD: 1.33856, +0.32%
• NZDUSD: 0.58088, +1.07%
• USDJPY: 162.233, −0.11%
• USDCAD: 1.40563, −0.63%
• USDCHF: 0.80899, −0.68%
Key Points
US inflation slowed more sharply than expected in June, putting pressure on the dollar and reducing expectations for further Federal Reserve rate hikes.
• US CPI MoM: −0.4% vs −0.1% forecast and +0.5% previously
• US CPI YoY: 3.5% vs 3.8% forecast and 4.2% previously
Following the release, the probability of a September Fed rate hike fell to 58% from 76%. Expectations for a December increase declined to 79% from 90%.
The Bank of Canada will announce its interest-rate decision on July 15, 2026.
The market is almost evenly divided. There is a 47% probability that the BoC will keep the rate unchanged at 2.25% and a 53% chance of an increase of at least 25 basis points.
What’s Next
Wednesday, July 15, 2026
The BoC decision and accompanying guidance will determine whether USD/CAD extends its decline or stages a recovery. A rate hike or hawkish message could support the Canadian dollar, while an unchanged decision combined with cautious guidance may help USD/CAD rebound.
TA Overview
USD/CAD remains under pressure following the post-CPI decline. Near-term direction will depend heavily on the BoC outcome, with elevated volatility likely around the announcement.
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