Canadian Dollar climbs to 1.4000 against US Dollar after suspected Japanese intervention

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USD/CAD extends its decline on Thursday, slipping to a six-week low as the US Dollar (USD) weakens across the board following a sharp rally in the Japanese Yen (JPY). At the time of writing, the pair trades around 1.3996, staying on the back foot for a third consecutive day.

USD/CAD trades at its lowest level since mid-June as the US Dollar weakens across the board.
Suspected Japanese intervention and softer US economic data weigh on the Greenback.
Investors look ahead to Canada's GDP report due on Friday.

The latest leg lower came after USD/JPY plunged nearly 480 pips, sliding below the psychological 160.00 level. The speed of the move fuelled speculation that Japanese authorities may have intervened in the foreign exchange market to support the Yen.

Earlier on Thursday, weaker-than-expected US second-quarter Gross Domestic Product (GDP) growth and softer core Personal Consumption Expenditures (PCE) inflation prompted traders to scale back bets on a September Fed rate hike. The CME FedWatch Tool shows around a 55% probability of a 25-basis-point (bps) increase, down from roughly 60% before the data.

However, inflation risks are building again as the war in the Middle East disrupts energy supplies and keeps Oil prices elevated, potentially forcing the Fed to maintain restrictive monetary policy for longer.

On Wednesday, the Fed left interest rates unchanged at 3.50%-3.75% for a fifth consecutive meeting. Three policymakers voted for an immediate hike, while Fed Chair Kevin Warsh reiterated the central bank’s commitment to restoring price stability.

Meanwhile, higher Oil prices typically support the commodity-linked Canadian Dollar (CAD), given Canada’s status as a major crude exporter. West Texas Intermediate (WTI) trades near $82.70 per barrel, holding much of Wednesday’s sharp advance. Attention now turns to Canada’s monthly GDP data for May, due on Friday.

On the Bank of Canada (BoC) outlook, TD Securities described the July Summary of Deliberations as “relatively balanced.” Policymakers judged that the economy is “adjusting to recent shocks,” but remained concerned about medium-term inflation expectations “drifting higher.” TD also noted that US tariffs remain an “ever-present downside risk to growth,” while the minutes discussed a possible policy response if Oil prices “increase and stay higher.”

US Dollar Price Today

The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Canadian Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.52%	-0.75%	-2.69%	-0.37%	-1.05%	-1.44%	-1.13%
EUR	0.52%		-0.23%	-2.16%	0.15%	-0.55%	-0.93%	-0.60%
GBP	0.75%	0.23%		-1.91%	0.38%	-0.31%	-0.69%	-0.35%
JPY	2.69%	2.16%	1.91%		2.36%	1.66%	1.26%	1.62%
CAD	0.37%	-0.15%	-0.38%	-2.36%		-0.68%	-1.07%	-0.73%
AUD	1.05%	0.55%	0.31%	-1.66%	0.68%		-0.37%	-0.05%
NZD	1.44%	0.93%	0.69%	-1.26%	1.07%	0.37%		0.38%
CHF	1.13%	0.60%	0.35%	-1.62%	0.73%	0.05%	-0.38%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

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