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USD/CAD holds near 1.4105 as Fed decision keeps traders cautious
The Canadian dollar’s rebound is capped by falling West Texas Intermediate oil, which has slipped to a fresh weekly low amid US-Iran ceasefire talks.
USD/CAD was trading near 1.4105 on Tuesday, down 0.14% on the day, but the pair stayed close to recent highs as investors avoided aggressive positioning ahead of the Federal Reserve’s monetary policy decision.
FXStreet said the US dollar lacked clear direction because markets widely expect the Fed to keep interest rates unchanged, with attention focused on updated economic projections and comments from Fed Chair Kevin Warsh. The report also noted that US President Donald Trump urged the Fed to lower rates, arguing recent inflation data support easing, while he took a more conciliatory tone toward Iran.
For Canada, the Canadian dollar’s attempt at a modest rebound faced pressure from continued declines in oil. West Texas Intermediate oil fell to a fresh weekly low as US and Iran negotiations continued to preserve the ceasefire despite recent violations, a factor the outlet said typically weighs on currencies dependent on energy exports.
Recent US data were mixed, with the four-week average of ADP Employment Change dropping to 15K and the Conference Board Consumer Confidence Index easing to 90.8 in July from 92.2 previously. Those readings supported expectations for a less hawkish Fed tone later, though rates were still widely expected to remain unchanged at this week’s meeting, according to FXStreet.