USD/CAD

The BoC's hawkish hold at 2.25%, narrowing CAD/US rate differentials, and oil elevated above $80 on US-Iran Strait of Hormuz tensions form a powerful triple tailwind for CAD strength, keeping USDCAD pinned at the critical 1.4000 round number.

USDCAD has broken below the key 1.4050 consolidation floor and is testing the 1.4000 round-number support — a level not seen since June 2026 — driven by a hawkish BoC hold at 2.25% and oil-supply fears lifting the Loonie.

Main Risk

Fed rate hike signal from Kevin Warsh

New Fed Chair Warsh has kept rate hikes on the table despite softer CPI, meaning a hawkish Fed pivot could abruptly reverse the CAD/US rate differential narrowing and send USDCAD sharply back above 1.4100.