Daily Foreign Exchange Update for May 20, 2026
May 20, 2026
Spot Rates
- USDCAD: 1.3740 - 1.3745 (as at 8:55 am PST)
- Asia: 1.3745 to 1.3775
- Europe: 1.3753 to 1.3780
- North America: 1.3730 to 1.3775
Technical Support / Resistance
- S2 1.3680
- S1 1.3730
- R1 1.3780
- R2 1.3830
Key Economic Data Releases
- Tuesday - Canada CPI (Apr): +2.8% y/y exp +3.1% prev +2.4%
- No major U.S. data releases today
Important events we're watching this week:
- May 21, USA, Fed's Warsh speech
- May 22, Canada, Retail sales (Apr)
- May 22, USA, Initial Jobless Claims
Market Spotlight
USDCAD is pulling back from recent highs, trading near 1.3736 as a combination of softer-than-expected Canadian inflation and a delayed US military strike on Iran have trimmed some of the USD’s recent gains. Yesterday’s Canada CPI for April came in at 2.8% year-over-year, above the March reading of 2.4% but below the 3.1% consensus, as energy prices surged 19.2% annually driven by the Iran war, while core inflation pressures remained surprisingly contained. TD Economics noted there is “little argument yet for Bank of Canada rate hikes,” and market pricing for BoC hikes has eased this morning, offering modest CAD support. The BoC held its policy rate at 2.25% in late April, its third consecutive hold, and projects CPI to ease back toward 2% by early 2027.
On the geopolitical front, Trump announced Monday he was postponing a scheduled attack of Iran following requests from Saudi Arabia, the UAE, and Qatar, though he warned a “large scale assault” remains possible “on a moment’s notice.” Trump also extended the Iran ceasefire indefinitely while maintaining the naval blockade of Iranian ports. The news sent oil lower, with WTI pulling back from its recent highs near $104 and trading under $100 this morning. The prospect of easing energy prices is a double-edged sword for the CAD — while lower oil is a commodity headwind, reduced inflation pressure could give the BoC more flexibility.
Meanwhile, the US Senate confirmed Kevin Warsh as the new Federal Reserve Chair last week, succeeding Jerome Powell. Warsh, who has publicly argued that recent inflation is temporary and linked to the Iran war, faces an FOMC that is in no mood to cut rates with 10-year Treasury yields near 4.44% and the 30-year at 5.02%. Bond markets are pricing zero Fed cuts in 2026, and the DXY remains broadly supported as a result. Fed Chair Warsh is scheduled to speak Thursday in his first major public address since being sworn in, which markets will watch closely for any signals on the rate outlook.
- Currently, the TSX is up 1.04% while the DJIA futures are down 0.48%.
- EURCAD is up 0.14% trading between 1.5943 and 1.5992.
- GBPCAD is up 0.33% trading between 1.8396 and 1.8489.
- JPYCAD is up 0.10% trading between 0.008642 and 0.008658.
- Gold is up 1.19% trading between $4,453 - $4,553 USD/oz.
- Silver is up 2.10% trading between $73.08 - $76.61 USD/oz.
- Oil (WTI crude) is down 3.43% trading between $97.02 and $104.42.