US Dollar/Canadian Dollar Exchange Dynamics on 24 October 2025

The Canadian dollar (CAD) slipped modestly as U.S. President Donald Trump announced the termination of all trade talks with Canada. The announcement, reported by multiple outlets—including Scotiabank, ING, and the Financial Times—generated immediate pressure on the loonie. The USD/CAD pair hovered around the 1.4000 threshold, trading slightly above 1.4020 by the close of the session.

Immediate Market Response

  • Price Movement: On Friday, the pair gained roughly 0.20 %, moving from the prior close of 1.39866 to around 1.4020.
  • Technical Indicators: The nine‑day exponential moving average (EMA) at 1.4010 served as a key support level, and analysts noted a bullish reversal potential as the pair crossed it. The 14‑day relative strength index (RSI) remained above 50, reinforcing the bullish bias.
  • Range and Volatility: The currency remained within a tight trading range, reflecting a cautious market stance amid geopolitical uncertainty.

Influencing Factors

  1. Trump’s Trade Termination
    President Trump’s declaration to halt trade negotiations was perceived as a retaliatory move against an Ontario‑sponsored anti‑tariff advertisement. This action removed a positive catalyst for the CAD and triggered a reassessment of Canadian export prospects, particularly in the resource sector.

  2. U.S. Inflation Data
    The U.S. consumer price index (CPI) release for October 2025 reported lower‑than‑expected inflation figures. Market participants interpreted this as a signal that the Federal Reserve may ease its tightening cycle, thereby strengthening the USD relative to the CAD.

  3. Geopolitical Tensions
    Concurrently, reports of potential U.S. military action in Venezuela and ongoing trade frictions with China added to market uncertainty. While these events did not directly affect the CAD, they contributed to a risk‑off environment that generally favors the U.S. dollar.

Outlook

  • Short‑term: The USD/CAD pair is likely to remain above 1.4000 as the nine‑day EMA continues to act as a support level. Traders will monitor the USD’s performance against other commodity‑linked currencies such as the Australian and New Zealand dollars.
  • Medium‑term: Should the U.S. continue to signal accommodative monetary policy and the CAD’s trade environment deteriorate further, the dollar could maintain its upper‑level positioning. Conversely, any positive developments in U.S.–Canada trade relations or a resurgence in Canadian commodity prices could provide a counter‑push for the loonie.

In sum, the day’s events underscored the sensitivity of the USD/CAD pair to both macroeconomic data and geopolitical headlines. Market participants remain attentive to forthcoming U.S. inflation figures and any shifts in trade policy that could alter the current trajectory.