Markets await the Federal Reserve’s rate decision and economic projections, weighing on USD while CAD recovers modestly despite falling WTI prices.
USD/CAD fell 0.14% to near 1.4105 on Tuesday, retreating from recent highs as traders await the Federal Reserve’s monetary policy announcement. The US Dollar remains directionless ahead of the widely expected decision to hold interest rates steady, with focus shifting to updated economic forecasts and Fed Chair remarks.
The Canadian Dollar edged higher despite a decline in West Texas Intermediate (WTI) Oil to a fresh weekly low. Negotiations between the US and Iran over a ceasefire have pressured crude prices, a headwind for Canada’s energy-dependent economy. Mixed US economic data, including a drop in the four-week ADP Employment Change average to 15K, added to market uncertainty.
US President Donald Trump reiterated calls for lower interest rates, citing inflation data, while adopting a softer stance on Iran, easing geopolitical tensions. The Fed’s decision and guidance will likely dictate near-term direction for the currency pair.