The USD/CAD pair trades with a bearish bias around 1.3620, the lowest level since July 12, during the early European session on Wednesday.
USD/CAD trades in negative territory for the fourth consecutive day near 1.3620 in Wednesday’s Asian session. Markets are already expecting a 25 bps rate cut in September, with some anticipating a larger 50 bps cut. Canada ’s annual CPI inflation rate fell to 2.5% in July, supporting a third straight BoC rate cut. The expectation that the US Federal Reserve would start its easing cycle in September continues to weigh on the US Dollar .
Other factors include market sentiment – whether investors are taking on more risky assets or seeking safe-havens – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar. How do the decisions of the Bank of Canada impact the Canadian Dollar? The Bank of Canada has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another.
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