Canadian Dollar Update, July 20, 2026 – Canadian Dollar awaiting CPI

Canadian Dollar awaiting CPI

• Ongoing US and Iran attacks underpin crude prices
• Canada inflation expected to ease
• USD opens on a mixed note

USDCAD open: 1.4030, overnight range 1.4003-1.4030, close 1.4021, WTI 81.27, Gold 4020.68

The Canadian dollar continued to consolidate its recent gains which were mainly due to the narrowing of CAD/US rate differentials. The 10-year spread sits at -99.2, while the 2-year holds steady at -131.2.

Canadian inflation data takes centre stage today. Headline CPI is forecast to have climbed 2.9% y/y in June, down from May’s 3.2% pace. Yet the BoC’s preferred core gauges, CPI-trim and CPI-median, sit at just 2.0% and 2.1% respectively, suggesting the central bank sees little evidence of an inflation problem brewing.

WTI crude bounced in a 80.97-84.59 range and last changed hands at 81.56 in New York trading. The latest round of US-Iran strikes has brought shipping through the Strait of Hormuz to a standstill.

Global markets shrugged off the weekend’s renewed hostilities, trading with a cautious but not particularly alarmed tone. Crude remains the epicentre of stress, while European equities, Treasuries and FX have shown only selective pockets of risk aversion.

Asian trading was subdued with Japan closed for holiday. Hong Kong’s Hang Seng jumped 2.36% while Australia’s ASX 200 finished flat.

As of 7:50 am, the UK’s FTSE 100 is flat, the French CAC 40 has gained 0.63% and the German DAX is up 0.55%. S&P 500 futures have risen 0.55%, the 10-year Treasury yield is 4.547%, and the DXY is at 100.76.

EURUSD held close to Friday’s 1.1440 close, moving in a 1.1424-1.1450 range despite ongoing risks from the weekend’s US-Iran strikes and firmer crude prices. Caution ahead of Thursday’s ECB meeting kept broader moves in check.

GBPUSD drifted higher in a quiet 1.3439-1.3481 band overnight. The UK gets a new Prime Minister today as Andy Burnham is sworn in to succeed Keir Starmer. The Rightmove House Price index eased 0.1% m/m in July, an improvement from June’s 0.5% decline.

USDJPY traded narrowly in a 162.31-162.58 range with Japanese markets closed for a holiday. Rising crude prices provided some support, though the usual worries over FX intervention capped further upside.

AUDUSD moved sideways in a 0.6964-0.7009 band during a quiet session, caught between reduced odds of a September Fed hike, a somewhat hawkish RBA tone, and a modest uptick in risk-averse sentiment.