USD/CAD Eyes 1.4130 as CAD Misses Iran Ceasefire Boost, USMCA Risks Loom

USD/CAD trades near 1.3650-1.3900 in mid-June with upward momentum toward November highs around 1.4130. Canada entered a technical recession after Q1 GDP contracted -0.1% annualized, following Q4 2025's -0.2% decline, while residential investment plunged 7.9%. The Bank of Canada held its policy rate at 2.25% amid sticky inflation, contrasting with a hawkish Fed supported by hotter May CPI at 4.2% y/y. Oil-price support for the loonie has repeatedly failed to offset US-Canada rate divergence and rising USMCA renewal uncertainty ahead of the July 1 deadline. Markets now price limited BoC easing this year, keeping downside pressure on CAD despite WTI rebounds above $78.