The USD/CAD pair rebounded on Thursday, reaching a fresh daily high, but lacked sustained momentum. The Canadian Dollar remains under pressure from the Bank of Canada's dovish stance and bearish crude oil prices. The US Dollar finds support from the Federal Reserve's decision to maintain its policy rate and a cautious approach to lowering borrowing costs.
The USD/CAD exchange rate experienced a modest recovery on Thursday, rising over 40 pips from its intraday low to reach a fresh daily high around 1.4435. However, this upward movement lacked sustained momentum, with spot prices remaining confined to a familiar range observed over the past month. The Canadian Dollar (CAD) continues to face downward pressure due to the Bank of Canada's (BoC) relatively dovish stance and concerns regarding US President Donald Trump's threatened trade tariffs .
The BoC's decision to cut interest rates for the sixth consecutive time since June, coupled with the announcement to end its quantitative tightening program, further weighs on the Loonie. Additionally, bearish sentiments surrounding crude oil prices, another key factor influencing the CAD, provide support to the USD/CAD pair. Meanwhile, the Federal Reserve (Fed) chose to maintain its policy rate at the conclusion of its two-day meeting on Wednesday, signaling no immediate intention to lower borrowing costs until inflation and employment indicators warrant such a move. This stance lends some support to the US Dollar (USD) and contributes to the upward trend in the USD/CAD pair. However, uncertainty surrounding the Trump administration's policies continues to dampen US Treasury bond yields, hindering the USD from making significant gains. Looking ahead, traders await the release of the Advance US Q4 GDP print later in the North American session. Key economic indicators, including US bond yields and Trump's tariff plans, will influence the USD's trajectory. Furthermore, fluctuations in oil prices are expected to create short-term trading opportunities around the USD/CAD pair
USD/CAD Canadian Dollar US Dollar Bank Of Canada Federal Reserve Crude Oil Trade Tariffs Economic Indicators GDP
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