Canadian Dollar loses ground below 1.3650, eyes on Canadian CPI data
Source Fxstreet
- USD/CAD edges higher to 1.3630 amid the modest rebound in USD on Tuesday.
- The higher bets on rate cuts from the BoC and the decline in oil prices weigh on the Loonie.
- The higher-for-longer US rate narrative is likely to cap the pair’s downside in the near term.
The USD/CAD pair trades in positive territory for the second consecutive day around 1.3630 on Tuesday during the early European session. Market players await the remarks from more FOMC members. Also, the Canadian CPI inflation report for April will be in the spotlight.
The markets expect further cooling of CPI inflation figures on both an annual and monthly basis to convince the Bank of Canada (BOC) to cut interest rates next month. The Canadian central bank is anticipated to cut interest rates 2-3 times before the Fed's first rate cut, which might weigh on the Loonie and create a tailwind for the USD/CAD pair. Canada’s CPI inflation is expected to ease to 2.7% YoY in April from 2.9% in the previous reading, while the monthly CPI inflation is estimated to drop to 0.5% MoM in April from 0.6% in March.
Meanwhile, the decline in crude oil exerts some selling pressure on the commodity-linked Canadian Dollar (CAD), as Canada is the leading exporter of oil to the United States.
On the other hand, US Federal Reserve (Fed) officials remain cautious about the timing of its easing cycle, emphasizing the need to keep interest rates higher for extended periods of time to gain confidence that inflation is on track to meet its objective. This, in turn, might lift the Greenback and cap the pair’s downside for the time being.
Disclaimer: For information purposes only. Past performance is not indicative of future results.
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Bitcoin briefly loses 2025 gains as crypto plunges over the weekend.Bitcoin experienced a sharp decline this weekend, briefly erasing its 2025 gains and dipping below its year-opening value of $93,507. The cryptocurrency fell to a low of $93,029 on Sunday, representing a 25% drop from its all-time high in October. Although it has rebounded slightly to around $94,209, the pressures on the market remain significant.
The downturn occurred despite the reopening of the U.S. government on Thursday, which many had hoped would provide essential support for crypto markets. This year initially appeared promising for cryptocurrencies, particularly after the inauguration of President Donald Trump, who has established the most pro-crypto administration thus far. However, ongoing political tensions—including Trump's tariff strategies and the recent government shutdown, lasting a historic 43 days—have contributed to several rapid price pullbacks for Bitcoin throughout the year.
Market dynamics are also being influenced by Bitcoin whales—investors holding large amounts of Bitcoin—who have been offloading portions of their assets, consequently stalling price rallies even as positive regulatory developments emerge. Despite these sell-offs, analysts from Glassnode argue that this behavior aligns with typical patterns seen among long-term investors during the concluding stages of bull markets, suggesting it is not indicative of a mass exodus.
Notably, Bitcoin is not alone in its struggles, as Ethereum and Solana have also recorded declines of 7.95% and 28.3%, respectively, since the start of the year, while numerous altcoins have faced even steeper losses.
Looking ahead, questions linger regarding the viability of the four-year cycle thesis, particularly given the increasing institutional support and regulatory frameworks now in place in the crypto landscape. Matt Hougan, chief investment officer at Bitwise, remains optimistic, suggesting a potential Bitcoin resurgence in 2026 driven by the “debasement trade” thesis and a broader trend toward increased adoption of stablecoins, tokenization, and decentralized finance. Hougan emphasized the soundness of the underlying fundamentals, pointing to a positive outlook for the sector in the longer term.
Bitcoin experienced a sharp decline this weekend, briefly erasing its 2025 gains and dipping below its year-opening value of $93,507. The cryptocurrency fell to a low of $93,029 on Sunday, representing a 25% drop from its all-time high in October. Although it has rebounded slightly to around $94,209, the pressures on the market remain significant.
The downturn occurred despite the reopening of the U.S. government on Thursday, which many had hoped would provide essential support for crypto markets. This year initially appeared promising for cryptocurrencies, particularly after the inauguration of President Donald Trump, who has established the most pro-crypto administration thus far. However, ongoing political tensions—including Trump's tariff strategies and the recent government shutdown, lasting a historic 43 days—have contributed to several rapid price pullbacks for Bitcoin throughout the year.
Market dynamics are also being influenced by Bitcoin whales—investors holding large amounts of Bitcoin—who have been offloading portions of their assets, consequently stalling price rallies even as positive regulatory developments emerge. Despite these sell-offs, analysts from Glassnode argue that this behavior aligns with typical patterns seen among long-term investors during the concluding stages of bull markets, suggesting it is not indicative of a mass exodus.
Notably, Bitcoin is not alone in its struggles, as Ethereum and Solana have also recorded declines of 7.95% and 28.3%, respectively, since the start of the year, while numerous altcoins have faced even steeper losses.
Looking ahead, questions linger regarding the viability of the four-year cycle thesis, particularly given the increasing institutional support and regulatory frameworks now in place in the crypto landscape. Matt Hougan, chief investment officer at Bitwise, remains optimistic, suggesting a potential Bitcoin resurgence in 2026 driven by the “debasement trade” thesis and a broader trend toward increased adoption of stablecoins, tokenization, and decentralized finance. Hougan emphasized the soundness of the underlying fundamentals, pointing to a positive outlook for the sector in the longer term.
Gold price (XAU/USD) extends the decline to around $4,030 during the early Asian session on Tuesday. The precious metal edges lower as traders dialed back expectations of a US interest rate cut next month.
