CAD Weekly 1

CAD Weekly Outlook July 24, 2026

Global FX Strategy Global FX Strategy CAD WEEKLY Friday, July 24, 2026

Shaun Osborne Chief FX Strategist

Eric Theoret CAD Weekly Outlook FX Strategist CAD Slips Back with Eyes on the FOMC After a solid gain last week, the CAD is giving back about half of that 1% rise versus the USD this week. The CAD is outperforming most of its core, major currency peers but it is clearly struggling to gain against the big dollar. Our key charts above highlight some room for fundamental improvement in the CAD, with our fair value estimate little changed from last week at 1.4000. Spreads remain the key influence on the spot rate, according to our correlation matrix, with terms of trade also a significant, positive correlator with the CAD. The TRIX oscillator reflects modestly negative USD momentum. Calendar highlights for the coming week: Fundamental drivers are pulling in opposing direction for the CAD in effect. After narrowing last week, front end swap spreads have widened again since Monday as strong gains in crude oil prices have prompted markets to rebuild near-term Fed tightening Canada expectations. At the same time, Canadian terms of trade have improved significantly on the back of rising energy prices. This tug of BoC Summary of Deliberations—Wednesday war may persist; there is little sign that geo-political risk can ease any time soon which will keep oil prices firm. As a result, market May GDP—Friday expectations may—erroneously, we think—continue to reflect some risk of Fed tightening in the coming months. Our model US anticipates a 1.3980/1.4178 range (with 75% confidence) next week. While uncertainty runs pretty deep and conviction remains suitably low, we continue to think that USD gains to the 1.41+ area represent a good entry point for USD hedgers. Jun Durable Goods—Monday

Jul Consumer Confidence—Tuesday After a bit of a lull, event risk is back with a bang next week. Key focus for markets will be Wednesday’s FOMC decision which may overshadow benign core PCE data on Thursday. Fed tightening fears have rebounded alongside the jump in crude oil prices. Elevated FOMC decision—Wednesday tension in the Gulf region appears unlikely to ease anytime soon. The broadening in the conflict to cover Houthi rebels and their Jun Personal Inc/Spdg/PCE—Thursday blockade of Saudi shipping through the Red Sea adds significant risk to already structurally tight energy markets. Swaps pricing has Q2 Advance GDP—Thursday moved relatively significantly this week, with OIS pricing in 8 bps of tightening risk Friday, from 4bps at the start of the week. Term Q2 ECI—Friday yields have risen rapidly. Unusually (I think), the Fed has confirmed that there will be a press conference after the policy meeting. The economists’ consensus unanimously expects no change in rates and we concur. Rate hikes are off the table until Warsh’s review of Jul Chicago MI—Friday Fed operations is complete. Politics would clearly not factor in the Fed’s decision but a hike that could be tied directly to the president’s foreign policy choices would not be a great start for Chairman Warsh. The USD is likely to fall in the event of no hike, given swaps indicate a 30%+ risk of a hike, unless hawkish-sounding comments from Warsh provide a counterbalance. Canadian data points are limited to the minutes of the BoC’s latest policy decision (Wednesday) and May GDP data on Thursday.

CAD technicals have weakened. A solid USD rebound Monday (outside range day) sets the near-term floor at 1.4000/10, with additional support at 1.4060. We expect resistance at 1.4160 and (firmer) 1.4250.

NEXT WEEK'S NORTH AMERICAN CALENDAR T Day Country Release Period Consensus Last y Mon MX Trade Balance Jun -- 2259.2m US Durable Goods Orders Jun P 1.5% -4.5% US Durables Ex Transportation Jun P 0.9% 1.4% US Dallas Fed Manf. Activity Jul -- 0 Tue US Wholesale Inventories MoM Jun P -- 0.1% US FHFA House Price Index MoM May -- -0.1% US S&P Cotality CS 20-City YoY NSA May -- 1.14% US Richmond Fed Manufact. Index Jul -- 4 US Conf. Board Consumer Confidence Jul 92 91.2 Wed CA Bank of Canada Summary of Deliberations US FOMC Rate Decision (Upper Bound) 29-Jul 3.75% 3.75% Thu MX GDP…