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USD/CAD holds near 1.41 as Fed and BoC stay in focus
Scotiabank expects the Fed to remain on hold, which could narrow rate spreads and reduce the CAD's defensive stance.
Scotiabank strategists Shaun Osborne and Eric Theoret said USD/CAD is broadly stable around 1.41, with Canadian dollar moves driven mainly by front end rate differentials. They noted stronger oil prices provide some support for the CAD.
The strategists expect the Federal Reserve to remain on hold, a setup they say may narrow spreads and ease CAD defensiveness. They also pointed to the Bank of Canada minutes due later on Wednesday, which are expected to reflect improved growth and inflation but ongoing uncertainty ahead of the next policy decision in September.
On the technical front, FXStreet highlighted Scotiabank's view that the CAD's situation is little changed after USD gains through initial resistance at 1.4115 to 1.4125 failed to hold. A sustained push above 1.4125 is seen as targeting 1.4160.
Elsewhere in the FX market coverage, FXStreet cited a tight trading range for EUR/USD below 1.1400 as the US dollar benefits from risk aversion, and it noted that investors are positioning cautiously ahead of the Fed decision.
Latest closeEUR/USD 1.139 ▼0.1%