The Canadian Dollar weakens as Federal Reserve signals potential further rate hikes and oil prices decline below $75 per barrel.
USD/CAD climbed 0.21% to 1.4130 on Thursday, extending gains as the US Dollar strengthened following the Federal Reserve’s policy decision. The Fed held rates steady at 3.5%-3.75% but indicated potential for another hike this year, with half of FOMC members projecting tighter policy ahead.
Markets had anticipated the Fed’s decision, but updated economic projections reinforced a hawkish stance. Fed Chair Kevin Warsh emphasized persistent inflation and a resilient labor market, supporting the USD despite easing geopolitical tensions after a US-Iran preliminary agreement.
Meanwhile, the Canadian Dollar faced pressure from declining oil prices, with WTI crude falling below $75 per barrel, down over 0.90% on the day.