USD/CAD extends downside to 1.3670 with focus on BoC’s Macklem speech
Source Fxstreet
- USD/CAD declines further to 1.3670 ahead of BoC’s Macklem speech.
- Canadian annual headline CPI is estimated to have declined to 2.6%.
- Fed policymakers want to see inflation declining for months before shifting to rate cuts.
The USD/CAD pair extends its losing streak for the seventh trading session on Monday. The Loonie asset weakens as the US Dollar Index (DXY) corrects to near 105.66 after failing to extend upside above the crucial resistance of 106.00. The US Dollar (USD) drops as investors shift to risk-perceived assets amid expectations that the Federal Reserve (Fed) will deliver two rate cuts this year.
S&P 500 futures have posted decent gains in the European session, exhibiting a higher risk appetite of investors. 10-year US Treasury yields edge down to 4.25%.
Contrary to market expectations, Fed policymakers signalled in latest interest rate projections that there will be only one rate-cut this year. The Fed continues to reiterate the same despite May’s Consumer Price Index (CPI) report showed that price pressured eased more than expected.
Richmond Fed Bank President Thomas Barkin said on Friday that he wants more conviction before moving on rate cuts. Fed officials would get more conviction after seeing inflation declining for months.
Meanwhile, the Canadian Dollar strengthens even though investors expect that the Bank of Canada (BoC) will deliver subsequent rate cuts. For more clarity on the interest rate outlook, investors will look to the speech from BoC Governor Tiff Macklem, which is scheduled at 17:00 GMT.
This week, investors will also focus on the Canadian CPI report for May, which will be published on Tuesday. Annual headline CPI is expected to have decelerated to 2.6% from 2.7% in April.
Disclaimer: For information purposes only. Past performance is not indicative of future results.
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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.
