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The information provided on EL7.AI is for educational and informational purposes only and does not constitute financial advice.
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Sign InThe USD/CAD exchange rate strengthened to 1.3789 following softer-than-expected Canadian inflation data. According to reports, Scotiabank forecasts the pair to target the 1.38 level as expectations for further Bank of Canada tightening dampen. The Canadian Dollar's underperformance is attributed to the cooling of domestic price pressures and widening yield spreads that favor the Greenback.
These movements occur amid diverging economic signals between the two nations, with the US NY Empire State Manufacturing Index surging to 19.6, significantly beating the 7.5 forecast per market data. Meanwhile, official Canadian data showed housing starts at 279.3k on May 15, 2026, which provided limited support for the CAD against a US Dollar bolstered by resilient industrial production and higher Treasury yields.
The USD/CAD pair remains near its recent highs as of the close on May 21, 2026. Looking ahead, the economic calendar shows a lack of major Canadian catalysts in the coming week, suggesting that the pair's trajectory will likely be driven by US Federal Reserve commentary and broader market sentiment as it tests the 1.38 resistance zone.