The Canadian Dollar (CAD) is holding steady against the US Dollar (USD) and is doing better than most G10 currencies. Recently, Prime Minister Carney announced changes to the federal budget timeline, moving it to autumn and adjusting definitions for capital spending, but the market has not reacted strongly.

Currency Movements and Market Insights

The yield spreads between the US and Canada remain steady. A trade data report is on the way, likely showing a larger deficit for August. The risk for the Bank of Canada is connected to the upcoming speech by SDG Rogers. The USD/CAD pair is estimated to be slightly higher, showing early signs of weakness, with resistance around the 200-day moving average. It may trade within a range of 1.3920 to 1.3980. In other currency movements, the EUR/USD remains stable near 1.1650, and the GBP/USD has recovered from recent losses. Gold prices are rising, approaching $4,000 per troy ounce, while Bitcoin remains steady around $124,000 after a recent peak. Japan’s changing leadership is impacting its policy direction. The FXStreet Insights Team provides market observations and analyst insights. They remind readers that investing carries significant risk and this content is not personalized advice. The information may not be completely accurate. As of October 7th, 2025, the USD/CAD pair appears to be slowing down, struggling to exceed the mid-1.39s. Our fair value model suggests it should be around 1.3713, indicating that the current price may be too high. This could mean that the pair might soon move lower. Traders might find it useful to consider selling options for upward volatility, especially since the RSI indicator is flattening, indicating less momentum. Selling call spreads with strike prices above the important 1.40 level could be a smart strategy. This level has shown strong resistance, aligning with the 200-day moving average.

Trade Data and Market Strategy

Today’s international trade data for August confirmed a bigger deficit of C$2.5 billion, which is worse than the expected C$2.1 billion. While this may initially weaken the CAD, its strong ties to a robust US economy—highlighted by a solid jobs report of 215,000 jobs for September—are helping it stabilize. This mixed news suggests the market will likely remain in a range for now. Earlier this year, the market faced similar challenges at these levels before declining, indicating this is a tough selling zone. The main short-term risk to our viewpoint comes from the Bank of Canada’s speech on Thursday. We anticipate SDG Rogers will adopt a cautious tone, similar to the last bank statement that kept the policy rate at 3.5% due to global uncertainty. Although we are cautious about the CAD against the USD, its lower volatility makes it attractive compared to other currencies. With ongoing economic challenges in France and Japan, holding CAD against the Euro or Yen could be a more stable choice. This relative strength highlights the CAD’s appeal in a risk-averse trading environment. Create your live VT Markets account and start trading now.

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