Title: In-Depth Analysis and Forecast for USD/CAD – November 18, 2025
Based on the article originally published by DailyForex.com, authored by Crispus Nyaga
The USD/CAD currency pair continues to attract the attention of traders as it reacts to evolving macroeconomic data from both the United States and Canada. As of November 18, 2025, the pair is navigating through a key technical phase, influenced by interest rate policies, inflation data, and oil price movements. This detailed analysis builds on the insights from Crispus Nyaga’s original article and integrates additional perspectives from current market dynamics to offer a holistic view of the USD/CAD forecast.
Overview of USD/CAD Price Movement
– During the trading session leading up to November 18, 2025, USD/CAD exhibited a mild upward movement.
– As of this analysis, the currency pair is trading near 1.3760, slightly above the key support level of 1.3735.
– This upward momentum is part of a broader trend that started in early September 2025, when the pair rebounded from sub-1.3400 levels due to diverging monetary policy expectations between the U.S. Federal Reserve and the Bank of Canada.
– The pair is attempting to consolidate above crucial support zones that may define its next significant move.
Market Drivers Influencing USD/CAD
1. U.S. Economic Indicators
The USD has gained modest strength due to recently released U.S. data and central bank communications:
– Fed Policy Outlook: Comments from Federal Reserve officials, including recent remarks from the New York Fed President, indicate that the central bank remains cautious about declaring victory over inflation. While inflation in the U.S. has gradually cooled, it remains above the 2% yearly target set by the Fed.
– Inflation Data: The most recent Consumer Price Index (CPI) report for October 2025 showed inflation slowing slightly to 3.1%, down from 3.3% in September. Analysts expected a consistent dip that would have supported a dovish stance, but the marginal decline keeps the door open for rate hikes if economic pressures intensify.
– Labor Market: Nonfarm payrolls remain solid, with October numbers surprising to the upside at 190,000 jobs added, against expectations of 160,000. Strong employment data contributes to a potentially hawkish stance from the Fed.
– Market Expectations: Fed funds futures pricing, available through CME FedWatch, indicate that markets are anticipating a prolonged pause in rate cuts, with no reductions expected until Q2 2026.
2. Canadian Economic Conditions
The Canadian dollar (CAD) is closely tied to both domestic data and commodity prices, particularly oil. Recent Canadian economic indicators have added complexity to the USD/CAD movement:
– Interest Rate Decisions: The Bank of Canada (BoC) has paused its rate hiking cycle after seeing evidence of demand softening. The BoC interest rate remains at 5.00%, matching the Fed’s rate, which limits interest rate differentials as a factor for USD/CAD movements.
– Inflation Trends: Canada’s annual CPI remains around 3.8%, slightly below the peak seen in Q2 2025 but still elevated. Monthly CPI growth has been volatile, and concerns persist about price stickiness in housing and food costs.
– GDP Growth: Canadian GDP contracted slightly in the third quarter of 2025, confirming fears of an economic slowdown. A deceleration in consumer and business investment has also tempered the outlook for the CAD.
– Trade Balance: Canada’s trade balance has remained in surplus, but the scale is narrowing as global demand for oil fluctuates.
3. Crude Oil Prices
The Canadian dollar is significantly influenced by oil prices due to Canada’s status as a leading crude exporter. As of mid-November 2025:
– WTI Crude is trading near $80 per barrel, a rebound from sub-$75 lows seen in October.
– The recovery
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