US policy uncertainty weighed on the US dollar, causing the USD/CAD pair to decline slightly.
2026-02-27 13:16:41
On Friday during the Asian session, USD/CAD retreated slightly around 1.3675. The US dollar weakened, mainly due to uncertainty surrounding US trade policy.
The U.S. Supreme Court ruled that the emergency powers tariff framework used by the Trump administration did not fully support its trade policy system, but President Donald Trump subsequently stated that he would impose a uniform 15% tariff on imported goods and use the legislative space that allows for the imposition of tariffs within 150 days to advance the policy.
Subsequently, further fluctuations in US trade policy increased market uncertainty regarding the global trade environment. Policy uncertainty typically weakens risk appetite in capital markets and exerts temporary pressure on the US dollar.
In the labor market, initial jobless claims in the United States rose slightly to 212,000, lower than the market expectation of 215,000, indicating that the US job market still has a certain degree of resilience, which to some extent limits the room for further decline in the US dollar.
Data released by the U.S. Department of Labor shows that the labor market remains relatively stable, leading to divergence in market opinions on the Federal Reserve's policy path.
Regarding the Canadian dollar, changes in geopolitical risks have become a significant influencing factor. Omani Foreign Minister Badr al-Busaiidi stated that major progress has been made in the US-Iran nuclear negotiations, and that technical-level talks will continue next week.
If tensions between the US and Iran continue to ease, oil prices may come under pressure, and the Canadian dollar, as a commodity currency, is often positively correlated with oil prices, thus potentially weakening its performance. Overall, uncertainty surrounding US dollar policy and Canada's energy-exporting nature create a counterbalancing effect, keeping the USD/CAD pair in a range-bound pattern. Short-term market focus remains on inflation data and the direction of trade policy.
The daily chart shows that USD/CAD is still maintaining a medium-term upward trend, but the upward slope has slowed significantly. The moving average system remains in a bullish alignment overall, but the short-term moving averages have begun to turn downwards, indicating weakening short-term momentum.
The MACD indicator shows a continued contraction of bullish momentum bars, reflecting a slowdown in the rate of increase; the RSI is around 55, in the neutral-to-strong zone, and no overbought signal has appeared. The Bollinger Band's middle band is gradually moving upward, but the price is trading close to the middle band area, indicating that the market is entering a phase of directional choice.
The key support level on the daily chart is located in the 1.3620-1.3600 area, which is the short-term bullish defense zone; a break below this level could lead to a pullback to around 1.3550. Resistance levels are located at 1.3720 and 1.3800; a break above 1.3800 could reopen upside potential.
Editor's Note:
The current USD/CAD exchange rate movement is driven by the interplay between the US dollar's interest rate advantage and energy price volatility. If US inflation data rises again, it could reinforce the Federal Reserve's policy of maintaining high interest rates, supporting the dollar; conversely, if inflation declines, the dollar may continue to face downward pressure.
The Canadian dollar's trajectory will depend more on oil prices and the evolution of geopolitical risks. In the short term, the exchange rate is likely to remain range-bound, and a clear trend will require further clarification from macroeconomic data and policy signals.
The U.S. Supreme Court ruled that the emergency powers tariff framework used by the Trump administration did not fully support its trade policy system, but President Donald Trump subsequently stated that he would impose a uniform 15% tariff on imported goods and use the legislative space that allows for the imposition of tariffs within 150 days to advance the policy.
Subsequently, further fluctuations in US trade policy increased market uncertainty regarding the global trade environment. Policy uncertainty typically weakens risk appetite in capital markets and exerts temporary pressure on the US dollar.In the labor market, initial jobless claims in the United States rose slightly to 212,000, lower than the market expectation of 215,000, indicating that the US job market still has a certain degree of resilience, which to some extent limits the room for further decline in the US dollar.
Data released by the U.S. Department of Labor shows that the labor market remains relatively stable, leading to divergence in market opinions on the Federal Reserve's policy path.
Regarding the Canadian dollar, changes in geopolitical risks have become a significant influencing factor. Omani Foreign Minister Badr al-Busaiidi stated that major progress has been made in the US-Iran nuclear negotiations, and that technical-level talks will continue next week.
If tensions between the US and Iran continue to ease, oil prices may come under pressure, and the Canadian dollar, as a commodity currency, is often positively correlated with oil prices, thus potentially weakening its performance. Overall, uncertainty surrounding US dollar policy and Canada's energy-exporting nature create a counterbalancing effect, keeping the USD/CAD pair in a range-bound pattern. Short-term market focus remains on inflation data and the direction of trade policy.
The daily chart shows that USD/CAD is still maintaining a medium-term upward trend, but the upward slope has slowed significantly. The moving average system remains in a bullish alignment overall, but the short-term moving averages have begun to turn downwards, indicating weakening short-term momentum.
The MACD indicator shows a continued contraction of bullish momentum bars, reflecting a slowdown in the rate of increase; the RSI is around 55, in the neutral-to-strong zone, and no overbought signal has appeared. The Bollinger Band's middle band is gradually moving upward, but the price is trading close to the middle band area, indicating that the market is entering a phase of directional choice.
The key support level on the daily chart is located in the 1.3620-1.3600 area, which is the short-term bullish defense zone; a break below this level could lead to a pullback to around 1.3550. Resistance levels are located at 1.3720 and 1.3800; a break above 1.3800 could reopen upside potential.
Editor's Note:
The current USD/CAD exchange rate movement is driven by the interplay between the US dollar's interest rate advantage and energy price volatility. If US inflation data rises again, it could reinforce the Federal Reserve's policy of maintaining high interest rates, supporting the dollar; conversely, if inflation declines, the dollar may continue to face downward pressure.
The Canadian dollar's trajectory will depend more on oil prices and the evolution of geopolitical risks. In the short term, the exchange rate is likely to remain range-bound, and a clear trend will require further clarification from macroeconomic data and policy signals.
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