- USD/CAD has resurged this week and stays on course to register three successive session wins
- Strong US jobs data has reduced the prospect of an interest rate cut by the Federal Reserve before June
- Weakness in global oil prices and uncertainty in US-Canada trade relations adds downward pressure to CAD
The Canadian dollar is having a difficult time this February. The USD/CAD pair is heading for its third straight day of gains, its first in 2026. On February 13, 2026, it’s trading around 1.3613, up from a low near 1.3500 last week. That’s a rise of about 0.8% since Monday.
What’s Behind the USD’s Resurgence?
The story changed on February 11, 2026, when the U.S. Non-Farm Payrolls (NFP) report came out much better than expected. The U.S. Bureau of Labor Statistics data showed that job numbers were up, suggesting the U.S. economy isn’t slowing down. This has made markets rethink what the Federal Reserve will do next. Now, there’s just a 60% chance of a rate cut in June, which is helping the U.S. dollar gain strength.
The Fed has reasons to keep interest rates high, but the Bank of Canada (BoC) is in a tougher spot. On January 28, 2026, BoC officials mentioned that the Canadian economy is still hurt by trade restrictions and a lot of uncertainty. Canada’s GDP growth has been up and down, and the Canadian manufacturing sector has shrunk in three of the last four months, unlike the U.S.
Besides interest rates, there are worries about the USMCA Exit. Bloomberg reports say that the U.S. government is considering pulling out of the trade agreement. Since Canada sends about 75% of its exports to the U.S., even the possibility of a trade war could hurt the Loonie, no matter what the central banks do.
The Oil Drag On the Loonie
To make things worse, WTI Crude Oil hasn’t been doing well. Canada is a major commodity exporter, so its currency usually does well when oil prices are up. But the International Energy Agency (IEA) expects global supply to be higher than demand by almost 3.8 million barrels per day in 2026. With oil prices struggling to stay above $62, the loonie has lost a key source of support.
USD/CAD Forecast
The USD/CAD pair has its pivot at 1.3616, with its first resistance at 1.3651. A break past that will potentially open the path to test 1.3682. Conversely, going below 1.3616 will likely favour the sellers to take control. In that case, the first support is likely to be at 1. next resistance level is at 1.3675, which stopped gains earlier this month. If the price closes above this level, it could go up to 1.3745.
USD/CAD daily chart with key resistance and support levels on February 13, 2026. Created on TradingView
The stronger U.S. dollar is due to a better-than-expected U.S. job market and expectations that the Federal Reserve will keep interest rates high. The Canadian economy, is facing slow GDP growth and a shrinking manufacturing sector.
Beyond interest rates, the re-emergence of USMCA trade uncertainty is a massive downside risk. Any credible threat to Canadian exports to the U.S. would likely devalue the loonie significantly.
Canada is a top exporter of oil. When global supply is high and WTI prices drop to around $60, Canada’s export revenue decreases, which lowers demand for the loonie and pushes the USD/CAD pair higher.