USDCAD on Friday dropped -0.12% to 1.41754. Week ending 2025-02-14 moved lower by -1.09%. What you need to know.

USDCAD Analysis

Performance
Period	Pct	Chg	Momentum
Friday	-0.12%	-16.7 Pips
Week 2025-02-14	-1.09%	-156.4 Pips
February	-2.19%	-317.6 Pips

Upcoming key events for the new week (London Time)

Mon 05:00 AM Family Day
Mon 05:00 AM Presidents’ Day
Tue 01:30 PM CPI Inflation Rate (12-mth)
Wed 07:00 PM FOMC Meeting Minutes

What happened over the week

In the United States, recent economic indicators show mixed results. The Monthly Retail Trade in January observed a significant decline, reducing to -0.9% after a previous positive figure of 0.7%. Initial Unemployment Insurance Claims showed improvement, with a reduction to 213,000 from the previous 220,000, indicating a healthier labor market. The Producer Price Index (PPI) for January increased moderately to 0.4%, up from 0.2%, with an annual rise from 3.3% to 3.5%. Excluding Food and Energy, the PPI also rose by 0.3% monthly, and 3.6% yearly, reflecting underlying inflation pressures. The Monthly Treasury Budget Statement dropped further in deficit in January, widening to -$129 billion from -$87 billion in December. Inflation data revealed a marginal increase as the Consumer Price Index (CPI) saw monthly growth of 0.5% and an annual rate increase from 2.9% to 3.0% in January. The inflation rate excluding food and energy also grew to 0.4% monthly and 3.3% yearly.

The USDCAD currency pair moves are reactive to recent economic developments on both sides of the border. The fall in U.S. retail sales could negatively impact the dollar, as lower consumer spending indicates weaker economic activity. However, solid employment data and increased PPI indicate robust economic fundamentals that could buoy the dollar. On the Canadian side, the anticipation of Canada’s CPI Inflation Rate, considered a high-impact event, may influence USDCAD. Should Canada report higher inflation, it could strengthen the Canadian dollar, putting additional pressure on the pair to move lower, especially given USDCAD already hit a 9-week low. Furthermore, upcoming FOMC Meeting Minutes on Wednesday will provide insights into future U.S. monetary policy. If the minutes suggest a more hawkish stance from the Federal Reserve, it could lead to dollar appreciation, potentially counterbalancing recent downward pressures on USDCAD. Thus, the interplay of these economic factors and events points to potential volatility in the movement of USDCAD in the coming days.

From X (Twitter)

#Employment increased by 76,000 (+0.4%) in January 2025 and the employment rate rose 0.1 percentage points to 61.1%. The #unemployment rate declined 0.1 percentage points to 6.6%.

For more info: https://t.co/lVld9WKyyD pic.twitter.com/CToJna5ttU

— Statistics Canada (@StatCan_eng) February 7, 2025

What can we expect from USDCAD for the new week and what happened on Friday?

USDCAD on Friday dropped -0.12% to 1.42. Price is below 9-Day EMA while Stochastic is falling. For the week ending 2025-02-14, the pair dropped -1.09% or -156.4 pips lower.

Looking ahead, USDCAD looks mixed as the pair is likely to consolidate above week low of 1.41.

For the new week, our technical outlook looks bearish, immediate support level is at 1.41 (WS1) with break below could see further selling pressure towards 1.40 (WS2). For potential buyers, as the current momentum is bearish, we prefer to look at firm break of the week high of 1.43 as an important indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below week low of 1.41 would indicate selling pressure.

For the month of February, USDCAD is down by -2.19% or -317.6 pips lower.

Weekly key levels to watch out:

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Advance Monthly Sales for Retail and Food Services Source: Census Bureau
Business Formation Statistics Source: Census Bureau
Powell, Semiannual Monetary Policy Report to the Congress Source: Federal Reserve