Canadian Dollar Gains vs US Dollar | BoC Inflation Impact & USD/CAD Forecast 2025

In this video, we break down the recent performance of the Canadian Dollar (CAD) against the US Dollar (USD) amid rising inflation concerns in Canada. Despite a slight gain of about 0.17% on Tuesday, the CAD faces pressure as Canadian inflation accelerated faster than expected in April 2025. We analyze key inflation figures from the Bank of Canada’s Consumer Price Index, including a headline CPI increase of 1.7% year-over-year and a sharper core CPI rise to 2.5%.
The Bank of Canada has aggressively cut interest rates seven times since June 2024, dropping from 5% in 2023 to 2.75% this March. However, with inflation climbing and housing prices remaining high, the BoC’s rate-cutting window may be closing.
Technically, the USD/CAD pair is testing resistance near the 200-day exponential moving average around 1.4025. While the Canadian Dollar has shown short-term resilience, ongoing inflation and technical barriers may limit further gains unless inflation eases or the BoC changes its monetary policy stance.
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