USD/CAD Eyes Upside as Canada Capital Spending Slows to 3.7% for 2026

USD/CAD faces potential upward pressure as Statistics Canada reported a notable deceleration in non-residential capital and repair expenditure intentions for 2026. Total capital expenditure by businesses, governments, and institutions is projected to rise by $14.4 billion in 2026, a significant step down from the $17.4 billion increase recorded in 2025. The headline growth rate drops to 3.7% from the 2025 pace of 4.7%, signaling a cooling in investment appetite across the Canadian economy. This deceleration in capital spending could weigh on the Canadian dollar as reduced business investment typically points to softer economic growth ahead, potentially influencing the Bank of Canada's monetary policy trajectory. Traders should monitor whether this data reinforces expectations for further BoC rate adjustments. On the technical side, USD/CAD may find support from this CAD-negative development, with any sustained move higher contingent on broader USD dynamics and upcoming Canadian GDP and employment releases. The data adds to a mixed outlook for CAD heading into Q2 2026.