Usdcad sees slight drop amid mixed US economic signals and Canadian resilience

USDCAD Analysis

Performance after Thursday
Period	Pct	Chg	Momentum
Thursday	-0.08%	-11.1 Pips
Week to-date	0.12%	17 Pips
May	1.17%	162 Pips

Upcoming key events (London Time)

No major events for the day.

What happened lately

The U.S. economic data for April and May 2025 presents a mixed picture. Industrial production remained stagnant at 0% in April, marking an improvement from March’s -0.3%. However, the retail trade control group saw a decline of -0.2% in April from a previously revised 0.5% in March, indicating a slowdown in consumer spending. The New York Empire State Manufacturing Index further declined in May to -9.2 from April’s -8.1, suggesting a weakened manufacturing sector. In contrast, the Manufacturing Business Outlook Survey showed a significant recovery in May, improving to -4 points from April’s -26.4, signifying some optimism in the manufacturing outlook.

Producer prices reveal a deflationary trend, with the PPI excluding food and energy decreasing by 0.4% in April, from a previously revised 0.4%, signaling reduced input costs. The annual PPI, excluding food and energy, also fell to 3.1% from 3.3%, indicating moderating producer inflation over 12 months. The overall PPI decreased to 2.4% from March’s 2.7%. Concurrently, the one-month PPI decreased by 0.5% in April from -0.4% in March. Retail trade figures also show a sharp decline with monthly retail trade dropping significantly in April to 0.1% from March’s revised 1.5%, while retail trade excluding automobiles similarly fell to 0.1% from 0.5%. Initial unemployment claims slightly increased to 229,000 in the week ending 10 May, up from 228,000, suggesting some employment softening.

The Canadian economic impact on the USDCAD exchange rate is modest, with the pair dropping by -0.08% to 1.39590, indicating consolidation. Despite no major events lined up for the day, the mixed U.S. economic signals imply potential stability and may result in cautious trading behavior concerning the USDCAD pair. Economic metrics hint at a modest slowing in certain sectors, which could lead to less aggressive monetary policies, thereby affecting investor sentiment toward USD against the CAD. If the Canadian economy remains robust against these U.S. economic vulnerabilities, any further drop in USDCAD may likely reflect these broader economic shifts.

Latest from X (Twitter)

Tweets by Statistics Canada

What can we expect from USDCAD today?

USDCAD on Thursday dropped -0.08% to 1.39590. Price is above 9-Day EMA while Stochastic is falling.

Updated daily direction for USDCAD looks mixed as the pair is likely to consolidate above 1.39378 (S1).

Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 1.40046 or trades above daily pivot 1.39712. Break above could target R1 at 1.39924. While to the downside, we are looking at 1.39378 (S1) and daily low of 1.39500 as support levels. USDCAD need to break on either side to indicate a short-term bias. A close below 1.39500 would indicate selling pressure.

For the week to-date, take note that USDCAD is bullish as the pair continued to trade higher and is up by 0.12% over the past few days.

Key levels to watch out:

#USDCAD Trending on Twitter

[custom-twitter-feeds hashtag=”#USDCAD” num=3 showheader=false]