Bank of Canada rate cut expectations support USDCAD growth

The USDCAD pair is slightly declining, with the price currently at 1.4365. Discover more in our analysis for 10 March 2025.

USDCAD forecast: key trading points

• Canada’s economy added only 1 thousand jobs, falling short of the expected 20 thousand
• Expectations of a Bank of Canada key rate cut rose due to weak employment data
• USDCAD forecast for 10 March 2025: 1.4495

Fundamental analysis

The USDCAD rate is correcting after Friday’s surge, primarily driven by a mixed US employment report. In February, the country’s economy added 151 thousand jobs, below the forecast of 160 thousand, while the unemployment rate unexpectedly rose to 4.0%, and wage growth slowed to 0.3%.

However, the Canadian labour market was in an even more challenging situation. Unemployment remained at 6.6%, with the economy creating only 1 thousand jobs, falling short of the expected 20 thousand.

Such a sharp slowdown compared to the sustainable growth seen since August 2024 heightened expectations of a 25-basis-point Bank of Canada key rate cut at the meeting this week. According to the USDCAD forecast for today, such expectations may support further growth of the currency pair despite the current correction.

USDCAD technical analysis

The USDCAD rate is correcting after strong growth. The price is hovering above the EMA-65, indicating support from buyers. The Stochastic Oscillator also signals a potential reversal as the %K and %D lines crossed from bottom to top. The USDCAD forecast suggests growth to 1.4495. A breakout above the upper boundary of the descending channel will confirm the bullish momentum, with the price consolidating above 1.4405.

Summary

Bank of Canada rate cut expectations create conditions for further growth of the USDCAD pair despite the current correction. The USDCAD technical analysis indicates growth potential, and a breakout above 1.4405 will confirm the bullish momentum, with the target at 1.4495.