USD/CAD extends gains for fifth day as Carney unveils capital expensing plan

USD/CAD is higher for a fifth consecutive session as the US dollar strengthens broadly on expectations of a more hawkish Federal Reserve, leaving the Canadian dollar as one of the weaker G10 performers. The move is primarily dollar-driven rather than a reflection of deteriorating Canadian fundamentals, with rising US yields widening the rate differential in favour of the greenback. Beneath the surface, Prime Minister Mark Carney is positioning fiscal policy to spark a domestic investment boom, announcing that Canada will allow immediate expensing for most new capital investment. The measure is designed to accelerate business capex, improve productivity and attract foreign direct investment, potentially offering medium-term structural support for the loonie even as short-term flows favour USD. For traders, the fiscal stimulus angle may cushion CAD downside over time, but near-term direction remains tied to Fed pricing, US Treasury yields and crude oil prices. A continued dollar bid keeps USD/CAD biased higher, while any dovish repricing of Fed expectations or firmer oil would be the most likely catalyst for a corrective pullback in the pair.