The Canadian Dollar has stayed mostly the same but remains weaker after a week of losses against the US Dollar. Uncertainty around US/Canada trade talks and the upcoming Bank of Canada policy decision are affecting its movement. The difference between US and Canadian rates has widened a bit since last week, leading to a current USD value estimate of 1.3651. Even with trade uncertainties, a change in the Bank of Canada’s rates is unlikely, as current swaps show no immediate shifts. The USD has risen past 1.3750 and is nearing the mid-July peak around 1.3775. Charts show that the USD’s rise is not slowing down, with a positive short-term trend ahead. The resistance zone is between 1.3775 and 1.38, while support is found between 1.3725 and 1.3730. This article provides information only and should not be seen as investment guidance. It’s important to do thorough research before making investment decisions due to risks, including the chance of losing your total investment. The weakness of the Canadian Dollar is expected to continue into the last week of July 2025, mainly due to uncertainties in trade negotiations. This situation suggests that traders should be careful about anticipating any short-term strength in the currency. This caution is intensified by the market’s focus on the upcoming decision from the Bank of Canada. Recent data backs this view. Canada’s recent retail sales report showed a 0.5% decline, missing expectations and indicating a slowing economy. In contrast, the US has experienced stronger-than-expected durable goods orders, further widening the economic gap between the nations. This divergence favors a stronger US Dollar, similar to trends seen in early 2023 that pushed the rate above 1.3800. Given the positive momentum, derivative traders might want to look for ways to benefit from a rising USD/CAD exchange rate. Buying call options with strike prices close to the 1.3800 resistance level could be a good strategy for the weeks ahead. Technical charts suggest there are few obstacles before reaching this point, with an upward trend appearing likely. While the swaps market doesn’t show an interest rate change coming, the central bank’s statement will play a key role in determining short-term direction. Any language that seems cautious or more focused on economic slowdown could help the US Dollar rise even more. We will watch the support level between 1.3725 and 1.3730 closely for any signs of a trend breakdown. It’s important to manage risk carefully, as unexpected progress in trade talks could quickly strengthen the Canadian Dollar. Therefore, consider option strategies that limit potential losses. Given the possibility of rapid changes, any positions should be taken with a clear understanding of the risks involved.

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