Canadian Dollar Slides Amid Falling Oil Prices and Trade Surplus Gains

The USD/CAD pair rose toward weekly highs as a sharp drop in Brent crude prices pressured the Canadian dollar, despite Canada reporting its strongest merchandise trade surplus in four years. Strong domestic indicators, including better‑than‑expected GDP growth and a widening trade surplus, would normally support the loonie, but investors focused on oil, Canada’s largest export, which slipped below $80 per barrel.

Technical analysis shows the pair consolidating around the 50% Fibonacci retracement, with buyers attempting to hold above this level while sellers test the 38.2% resistance. Broader market sentiment was also influenced by weaker U.S. economic data and reassessments of Federal Reserve policy, limiting gains in the U.S. dollar. Analysts note that the Canadian dollar remains highly sensitive to energy price movements and future U.S. monetary‑policy signals.