USD/CAD Price Analysis – March 11, 2025

Daily Price Outlook

During the European trading session, the USD/CAD is struggling to stop its declines and remain under pressure around 1.4407.

The pair faces downside pressure as the US Dollar (USD) weakens amid growing concerns that uncertainty over tariff policies could push the US economy into recession.

Investors are now looking ahead to February’s Consumer Price Index (CPI) release on Wednesday, which could provide further insights into inflation trends and the Federal Reserve’s (Fed) potential policy direction.

US Economic Uncertainty Weighs on the US Dollar

The global market sentiment turned cautious after former President Donald Trump said the economy is in a "transition period," hinting at a possible slowdown. Investors saw this as a warning of economic trouble.

The US Dollar Index (DXY) is weak, staying around 103.80. Meanwhile, US job data for February was weaker than expected, increasing hopes that the Federal Reserve will cut interest rates multiple times this year.

According to LSEG data, traders now anticipate a total of 75 basis points (bps) in rate cuts, with a June rate cut fully priced in. On the data front, the US Bureau of Labor Statistics (BLS) reported on Friday that Nonfarm Payrolls (NFP) increased by only 151,000 in February, missing the forecast of 160,000.

Meanwhile, January’s job growth was revised downward to 125,000 from 143,000. This weak labor market data adds to recession fears and puts further pressure on the US Dollar.

Impact of Tariff Policies and Trade Tensions

On the other hand, the US Commerce Secretary Howard Lutnick said the 25% tariffs on steel and aluminum will start on Wednesday as planned.

US steelmakers have urged Trump to maintain these tariffs, but businesses reliant on these materials may face increased costs, further impacting economic stability.

Meanwhile, Trump also commented on trade relations with Ukraine, mentioning that his administration is considering lifting an intelligence pause and reviewing tariff measures against Russia. These geopolitical uncertainties contribute to market caution, further weakening USD sentiment.

Bank of Canada’s Rate Decision and USD/CAD Outlook

On the Canadian front, the Bank of Canada (BoC) is widely expected to cut interest rates by 25 basis points at its upcoming March meeting on Wednesday.

Analysts at CIBC predict that the BoC will lower its benchmark rate to 2.75%, with further cuts likely if trade uncertainty persists.

Hence, the rate cut by the BoC could limit USD/CAD’s downside, but broader US economic concerns are likely to keep the pair under pressure.

Looking ahead, traders will closely watch the US CPI data release on Wednesday, as it could shape expectations for the Fed’s future monetary policy decisions.

If inflation remains subdued, it could reinforce expectations for multiple rate cuts, adding further pressure on the USD and influencing USD/CAD’s movement.

USD/CAD – Technical Analysis

The USD/CAD pair is trading at $1.44456, edging up 0.03% as buyers maintain control above the $1.44097 pivot point. The pair remains in an uptrend, bolstered by a weaker Canadian dollar and sustained strength in the U.S. dollar.

The 50-day EMA at $1.43654 is providing strong dynamic support, reinforcing bullish momentum. If USD/CAD continues higher, immediate resistance is seen at $1.44735, followed by $1.45426 and $1.45986, signaling further upside potential.

On the downside, support at $1.43537 remains critical—losing this level could push the pair toward $1.43003, with further declines targeting $1.42409. However, as long as USD/CAD holds above the $1.44097 pivot point, the short-term trend favors buyers.

From a trading perspective, a buy entry above $1.44097 is favored, targeting $1.44739, with a stop loss at $1.43773. Key drivers include Fed rate expectations, oil price fluctuations, and overall risk sentiment in global markets.

Related News

- GOLD Price Analysis – March 11, 2025

- AUD/USD Price Analysis – March 11, 2025

- USD/CAD Price Analysis – March 04, 2025