{"id":115028,"date":"2025-06-02T20:47:32","date_gmt":"2025-06-02T16:47:32","guid":{"rendered":"https:\/\/noortrends.ae\/en\/?p=115028"},"modified":"2025-06-02T20:48:27","modified_gmt":"2025-06-02T16:48:27","slug":"canadian-dollar-gains-for-third-day-as-oil-prices-rise-and-us-dollar-weakens","status":"publish","type":"post","link":"https:\/\/noortrends.ae\/en\/canadian-dollar-gains-for-third-day-as-oil-prices-rise-and-us-dollar-weakens\/06\/02\/market-updates\/","title":{"rendered":"Canadian Dollar Gains for Third Day as Oil Prices Rise and US Dollar Weakens"},"content":{"rendered":"\n

The Canadian Dollar (CAD) continued its upward trend against the US Dollar (USD) for the third consecutive session on Monday, bolstered by higher oil prices and ongoing weakness in the Greenback. Positive developments in Canada\u2019s manufacturing sector, contrasted with a deeper contraction in US factory activity, further supported the Loonie\u2019s gains, keeping the USD\/CAD pair under pressure below the 1.3700 level. At the time of writing, the pair was trading at approximately 1.3698 during the North American session.

Manufacturing PMI Data Highlights Diverging Economic Trends
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The S&P Global Canada Manufacturing PMI edged up to 46.1 in May from 45.3 in April, signaling a slight improvement but marking the fourth consecutive month of contraction in the sector. Despite the uptick, output and new orders continued to decline sharply, reflecting ongoing challenges in Canadian manufacturing. In contrast, the US ISM Manufacturing PMI fell to 48.5 in
May from 48.7, missing market expectations and recording the steepest contraction since November 2024. The data underscored persistent economic uncertainty and rising cost pressures in the US, exacerbated by the volatile trade policies of President Donald Trump\u2019s administration, which have disrupted supply chains and heightened market unease.

Bank of Canada Rate Decision in Focus
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Attention is now turning to the Bank of Canada\u2019s (BoC) upcoming interest rate decision on Wednesday. Initially, markets had anticipated a potential rate cut, but Canada\u2019s stronger-than-expected Q1 GDP growth of 2.2% has shifted expectations. According to Reuters, investors now assign a 75% probability to the BoC maintaining its current policy rate of 2.75%. Scotiabank\u2019s Derek Holt strongly opposed any near-term rate cuts in a recent post titled \u201cNo way the BoC should be cutting any time soon, if at all.\u201d Holt highlighted the persistence of elevated core inflation, which remains sticky despite modest economic slack, and warned of looming tariff-related supply shocks that could further drive inflationary pressures.

Market Dynamics and Outlook
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The combination of rising oil prices\u2014a key driver for Canada\u2019s resource-dependent economy\u2014and a weaker US Dollar has provided a favorable backdrop for the Canadian Dollar\u2019s recent gains. However, the manufacturing sector\u2019s ongoing contraction signals underlying economic challenges that could temper the Loonie\u2019s momentum. As the BoC\u2019s decision approaches, market participants are increasingly focused on inflation risks, particularly in light of potential trade disruptions stemming from US policies. The USD\/CAD pair\u2019s current defensive stance below 1.3700 reflects these dynamics, with investors closely monitoring upcoming economic data and central bank actions for further direction.<\/p>\n","protected":false},"excerpt":{"rendered":"

The Canadian Dollar (CAD) continued its upward trend against the US Dollar (USD) for the third consecutive session on Monday, bolstered by higher oil prices and ongoing weakness in the Greenback. Positive developments in Canada\u2019s manufacturing sector, contrasted with a deeper contraction in US factory activity, further supported the Loonie\u2019s gains, keeping the USD\/CAD pair …<\/p>\n","protected":false},"author":13,"featured_media":61332,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[37,36],"tags":[],"class_list":["post-115028","post","type-post","status-publish","format-standard","has-post-thumbnail","","category-forex-markets","category-market-updates"],"_links":{"self":[{"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/posts\/115028","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/users\/13"}],"replies":[{"embeddable":true,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/comments?post=115028"}],"version-history":[{"count":2,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/posts\/115028\/revisions"}],"predecessor-version":[{"id":115032,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/posts\/115028\/revisions\/115032"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/media\/61332"}],"wp:attachment":[{"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/media?parent=115028"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/categories?post=115028"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/tags?post=115028"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}