USD/CAD: Keeping risk premium on for longer – ING

FXStreetApr 16, 2025 11:02 AM

View all comments（0）



While a Bank of Canada hold is widely expected, it's the looming US-Canada trade tensions and the outcome of Canada's late-April election that may shape the CAD's path. With US growth concerns persisting and new tariff risks on the horizon, USD/CAD remains vulnerable to volatilityING’s FX analysts Francesco Pesole and Chris Turner note.

USD/CAD premium persists on soft US outlook

"We are releasing this note on the day the Bank of Canada announces policy, and we narrowly expect a hold. That does not have major implications for USD/CAD."

"The Fed-BoC gap has only moved around 20bp in favour of CAD in April, which is not enough to justify USD/CAD below 1.40. But our view is that USD will continue discounting soft growth expectations for longer, which can justify the USD risk premium."

"The direction of the US-Canada trade relationship will be the main determinant of CAD moves ahead. Canada elects a new government at the end of April; Liberal leader Mark Carney is slightly ahead in the polls. Whoever wins promises to fight Trump on trade, and risks that new tariffs will be threatened ahead of very tricky USMCA renewal talks leave CAD at risk of corrections."

Disclaimer: The information provided on this website is for educational and informational purposes only and should not be considered financial or investment advice.

Comments (0)

Click the $ button, enter the symbol, and select to link a stock, ETF, or other ticker.

Commenting Guidelines

Recommended Articles

Why Is Alphabet (GOOGL) Selling Off After a Record $9.11 EPS Beat?

TradingKey - Alphabet reported EPS of $9.11, Cloud growth of 82%, and revenue of $119.8B in Q2 2026 - all records. So why is GOOGL selling off? Capex doubled to $44.9B and the EPS beat was mostly unrealised gains. Here is what actually happened.

Japan and South Korea Stocks Open Stronger, KOSPI Rises Over 3%, SK Hynix and Samsung Electronics Lead

TradingKey - During early Asian trading on July 23, Japanese and South Korean stock markets continued the rebound momentum from the previous session. Both major indices opened higher, with the KOSPI rising 3.41% and the Nikkei 225 up more than 0.5%.

Google Q2 Cloud Revenue Surges 82%: Net Profit Soars 298% YoY, 26% QoQ Capital Expenditure Growth Sparks Sharp Bull-Bear Divide

TradingKey - Alphabet (GOOGL, GOOG) released its second-quarter 2026 financial results after the close of U.S. markets on July 22, Eastern Time. As of press time, Google’s revenue for the period reached $119.796 billion, up 24% year-over-year (23% on a constant currency basis), exceeding market expectations of $116.93 billion. This marks the company's 12th consecutive quarter of double-digit revenue growth. Notably, Google Cloud performance was a highlight, with revenue surging 82% year-over-year to $24.8 billion.

Western Digital (WDC) Surges 12.5% to $548 - Kioxia Merger Talks, $900 Analyst Target

TradingKey - Western Digital surged 12.5% to $548 today as memory stocks rebounded and Kioxia merger talks resumed. HDD production is sold out through 2026. Cantor Fitzgerald targets $900, Citi $800. Earnings August 5. Here is the setup.

Alphabet Q2 Earnings Preview: $190 Billion AI Gamble Faces Major Test, Can Google Cloud Still Sustain the Growth Myth?

TradingKey - Alphabet (GOOGL) (GOOG) will release its second-quarter 2026 financial results after the U.S. market close on July 22. As one of the world's most valuable technology companies by market capitalization, Alphabet’s business spans multiple sectors including search advertising, YouTube, Google Cloud, generative AI, and autonomous driving. Its earnings performance not only impacts its own stock price but is also regarded as a crucial bellwether for the global AI investment cycle.

Featured Tools