Falling oil prices and pressure on the Canadian economy drove the USD/CAD exchange rate to rise for the fifth consecutive day.
2025-11-05 13:45:44
The USD/CAD pair continued its upward trend during the Asian session, trading at around 1.4110, marking its fifth consecutive day of gains. The market is primarily focused on the continued weakness in oil prices as a key factor weighing on the Canadian dollar.
As the largest exporter of crude oil to the United States, Canada's currency is highly correlated with oil prices. West Texas Intermediate (WTI) crude oil prices fell for the third consecutive trading day and are currently hovering around $60 per barrel.
Last week's API crude oil inventory data was unexpected, with inventories increasing by 6.5 million barrels, far exceeding the market's expectation of a decrease of 2.4 million barrels. This was the largest weekly increase since July.
The surge in inventories exacerbated market concerns about oversupply, further suppressing the rebound in oil prices and indirectly putting downward pressure on the Canadian dollar.
The dollar's performance is constrained by the prolonged fiscal shutdown in the US government. Now in its sixth week, the shutdown is poised to become the longest government shutdown in US history.
The recent short-term funding bill, pushed by Republicans, was rejected by the Senate for the 14th time, putting pressure on the dollar in the short term. However, Federal Reserve policies continue to provide some support for the dollar.
At a press conference following last week's meeting, Fed Chairman Jerome Powell said that further rate cuts in December remain uncertain, and policymakers may remain on the sidelines until new official data is released.
This cautious approach provided a bottom support for the US dollar, limiting the upward momentum of USD/CAD, but it still maintained a relatively strong trend.
From a technical perspective, the short-term bullish trend in USD/CAD continues, but upside potential may be limited by resistance around 1.4120. Support lies around 1.4060; a break below this level could trigger a short-term correction.
Overall, falling oil prices and pressure on the Canadian economy supported the continued rise of the US dollar against the Canadian dollar, but macroeconomic uncertainties in the United States limited further gains.
As the largest exporter of crude oil to the United States, Canada's currency is highly correlated with oil prices. West Texas Intermediate (WTI) crude oil prices fell for the third consecutive trading day and are currently hovering around $60 per barrel.
Last week's API crude oil inventory data was unexpected, with inventories increasing by 6.5 million barrels, far exceeding the market's expectation of a decrease of 2.4 million barrels. This was the largest weekly increase since July.
The surge in inventories exacerbated market concerns about oversupply, further suppressing the rebound in oil prices and indirectly putting downward pressure on the Canadian dollar.
The dollar's performance is constrained by the prolonged fiscal shutdown in the US government. Now in its sixth week, the shutdown is poised to become the longest government shutdown in US history.
The recent short-term funding bill, pushed by Republicans, was rejected by the Senate for the 14th time, putting pressure on the dollar in the short term. However, Federal Reserve policies continue to provide some support for the dollar.
At a press conference following last week's meeting, Fed Chairman Jerome Powell said that further rate cuts in December remain uncertain, and policymakers may remain on the sidelines until new official data is released.
This cautious approach provided a bottom support for the US dollar, limiting the upward momentum of USD/CAD, but it still maintained a relatively strong trend.
From a technical perspective, the short-term bullish trend in USD/CAD continues, but upside potential may be limited by resistance around 1.4120. Support lies around 1.4060; a break below this level could trigger a short-term correction.Overall, falling oil prices and pressure on the Canadian economy supported the continued rise of the US dollar against the Canadian dollar, but macroeconomic uncertainties in the United States limited further gains.
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