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fxJul 20, 2026, 1:38 PM

USD/CAD Rises as Canadian Inflation Misses, Dollar Strengthens

USD/CAD edged higher on Monday after Canadian inflation data came in softer than expected, while a firmer US dollar and geopolitical tensions in the Middle East added pressure on the loonie. The pair was trading near 1.4045, up 0.17%.

USDCAD

The Canadian dollar weakened on Monday as softer-than-anticipated inflation data weighed on the currency. The annual inflation reading fell short of market expectations, prompting traders to reduce bets on further tightening by the Bank of Canada.

Meanwhile, the US dollar remained broadly firmer, supported by a hawkish Federal Reserve stance and safe-haven demand amid escalating tensions in the Middle East. Geopolitical uncertainty kept financial markets on edge, adding to the loonie's downside.

At the time of writing, USD/CAD was trading around 1.4045, up 0.17% on the day. The pair continues to face upside risks as long as the divergence in monetary policy and risk sentiment persist.

Source: FXStreet Forex News