Loonie holds near 1.387 as a soft U.S. dollar and $91 Brent offset tariff risk; July CPI at 3.0% dims BoC cut odds

THREAT · Export Alberta · Currency

USD/CAD traded in a narrow 1.3841–1.3890 band on Aug. 18 and settled near 1.3872, according to Vantage Markets’ daily analysis, as a U.S. Dollar Index sitting at a two-month low (99.65) and Brent crude climbing to US$90.97 on its third straight daily gain propped up the Canadian dollar despite the looming tariff deadline. Canada’s headline CPI for July came in at 3.0% year over year, above the 2.9% consensus, although core inflation held at 2.0%. The Bank of Canada is at 2.25% against the Fed’s 3.50–3.75% range.

Technically the pair is sitting on converging moving averages at 1.3872 with support at 1.3825 and resistance at 1.3973 and 1.4059. The Aug. 21 tariff decision is the obvious catalyst in either direction: a signed deal likely pushes the loonie firmer, while a 50% duty taking effect would send USD/CAD toward the 1.40 handle.

What it means: For Alberta exporters invoicing in U.S. dollars, a loonie in the high 1.38s is a few cents less favourable than the 1.40-plus levels of earlier this year, and a hotter CPI print makes near-term BoC relief less likely. If you carry unhedged U.S. receivables into Friday, this is the week to talk to your bank about forward cover; if you are quoting new U.S. business, build the FX assumption and the tariff clause into the same conversation.