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RBC Comments on Canadian Dollar Ahead of This Wednesday's Central Bank

BY MT Newswires | ECONOMIC | 09/15/25 11:40 AM EDT

11:40 AM EDT, 09/15/2025 (MT Newswires) -- The Bank of Canada will announce its policy decision on Wednesday, noted RBC.

The recent data reinforced the Canadian dollar (CAD or loonie) weakness over the past month, said the bank. Although RBC acknowledges that a 'hold' at the central bank would result in a CAD-positive reaction, the BoC would need to fully close the door to cuts to change that CAD-weakness trend, especially against a backdrop of RBC's structurally lower US dollar (USD) view and crude oil prices unable to sustainably catch a bid in response to geopolitical headlines.

RBC thinks that any short-term rallies in the 1.3800-1.4000 range present an opportunity to sell USD/CAD for a long-term decline towards the low 1.3000s. The bank believes that a break below the roughly 1.3550/1.4000 range would take the materialization of Fed cuts and a definitive end to the BoC's cutting cycle.

While a daily close above 1.3874 would add to bullish price momentum, prices will have to pierce the August high at 1.3925 to reassert the uptrend in USD/CAD. Support is located at 1.3783 and 1.3722 -- the August low. A break below 1.3540 is required to reinstate the downtrend in place between February and June.

MT Newswires does not provide investment advice. Unauthorized reproduction is strictly prohibited.

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