FX.co ★ Canadian Dollar Halts Rally

The Canadian dollar's upward trend paused around $1.39, nearing the five-month peak of $1.387 reached on April 11th. This deceleration is attributed to dovish anticipations from the Bank of Canada and a slight uptick in the US dollar, which have collectively softened potential further advances. In March, Canada's annual inflation rate declined to 2.3%, slipping from February's 2.6%. This figure fell short of both market expectations and the Bank of Canada's projection of 2.5%, indicating the onset of anticipated stabilization following a 0.6 percentage point increase brought about by the conclusion of GST and HST exemptions. Concurrently, the recent dip in the U.S. dollar has also steadied after measures by President Trump to exempt vital technology products from reciprocal tariffs. Furthermore, discussions regarding a possible suspension of the 25% tariffs on auto imports have alleviated fears of immediate recessionary threats. Nevertheless, a sense of caution remains due to the ongoing U.S. Commerce Department's national security investigation into imports of semiconductors and pharmaceuticals.