The Canadian Dollar Loves Conflict – Has the CAD Reached a Long-Term Bottom?

Author: Elior Manier
Date: March 5, 2026

Overview

The Canadian Dollar (CAD) has faced significant challenges since the onset of Donald Trump's second term, primarily due to the "US First" policies that have isolated Canada economically. This has led to a cooling of the Canadian economy, which is heavily reliant on commodity prices and trade, particularly with the United States.

Economic Context

Canada's economy has been adversely affected by rising interest rates, particularly impacting variable mortgage rates that are more common in Canada compared to the fixed rates in the US. The Bank of Canada's rate hikes post-COVID have further strained the economy, leading to stagnation in GDP per capita since 2012.

Political Developments

In March 2025, Mark Carney succeeded Justin Trudeau as the leader of the Liberal Party, bringing a shift in political dynamics. Carney's administration has begun to forge new international trade agreements with countries like India, China, and Europe, positioning Canada as a "Middle power" despite the ongoing challenges from US policies.

Market Analysis of the CAD

The CAD has recently hit 16-year lows against the Euro and 22-year lows against the USD. However, there are signs of a potential turnaround, supported by rising prices in petroleum and gold. The article poses the question of whether the CAD has reached a long-term bottom.

Technical Analysis

The article provides a detailed technical analysis of the CAD against several currencies:

• USD/CAD: Currently ranging between 1.35 and 1.38, with key levels identified for potential breakouts.
• CAD/CHF: After losing over 25% of its value since 2022, there are signs of a reversal with bullish momentum indicated.
• EUR/CAD: The pair has broken below significant support levels, suggesting a bearish trend may continue.

Conclusion

While the Canadian economy faces structural challenges, the potential for a rebound in the CAD is supported by rising commodity prices and new trade agreements. Traders are advised to monitor key technical levels for signs of a long-term bottom in the CAD.