USD/CAD declines to near 1.3900 ahead of BoC’s monetary policy decision

USD/CAD slumps to near 1.3900 due to a significant weakness in the US Dollar.
Market participants start doubting the USD’s credibility due to Trump’s abrupt tariff announcements.
Investors await the BoC’s interest rate decision and Fed Powell’s speech.

Sagar Dua FXStreet

The USD/CAD pair falls sharply to near 1.3900 in Wednesday’s European session. The Loonie pair weakens as the US Dollar (USD) falls back after a short-recovery move on Tuesday. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, slumps to near 99.40.

Investors continue to dump the US Dollar amid fears that the escalating tariff war between the United States (US) and China would result in a stagflation. The incapability of the US to meet lost imports from China in terms of quantity and prices in a short span of time could lead to an increase in inflationary pressures and slow down the economic growth.

Meanwhile, diminishing credibility of the US Dollar due to erratic tariff announcements by US President Donald Trump has also weighed on the USD Index.

Going forward, the major trigger for the US Dollar will be Federal Reserve (Fed) Chair Jerome Powell’s speech, which is scheduled at 17:30 GMT.

In the neighbouring nation, investors will focus on the Bank of Canada’s (BoC) monetary policy decision, which will be announced at 13:45 GMT. The BoC is expected to leave interest rates at their current levels of 2.75%. This would be the first meeting since June in which the central bank will keep borrowing rates steady. Till now, the BoC has reduced its key borrowing rates by 225 basis points (bps).

Investors will also pay close attention on Boc Governor Tiff Macklem’s press conference to get cues about how Trump’s international policy will shape the monetary policy and the economic outlook.

Economic Indicator

Fed's Chair Powell speech

Jerome H. Powell took office as a member of the Board of Governors of the Federal Reserve System on May 25, 2012, to fill an unexpired term. On November 2, 2017, President Donald Trump nominated Powell to serve as the next Chairman of the Federal Reserve. Powell assumed office as Chair on February 5, 2018.

EUR/USD climbs to daily highs near 1.1820

EUR/USD now picks up pace and advances to the area of daily peaks north of the 1.1800 barrier at the end of the week. The pair’s decent move higher comes against the backdrop of a generalised lack of direction in the FX galaxy and the mild offered stance in the US Dollar.

GBP/USD trims losses, retests 1.3460

After briefly challenging its key 200-day SMA near 1.3440, GBP/USD now manages to regain some balance and revisit the 1.3460 zone on Friday. Cable’s pullback comes as the selling pressure on the Greenback gathers traction, reigniting some recovery in the risk-linked space.

Gold flirts with four-week highs past $5,200

Gold extends its rebound, climbing for a third consecutive session and pushing back above the $5,200 mark per troy ounce on Friday. The move higher continues to draw support from lingering geopolitical tensions and the ongoing uncertainty surrounding US trade policy, both of which are keeping safe-haven demand firmly in play.

Bitcoin, Ethereum and Ripple consolidate with short-term cautious bullish bias

Bitcoin, Ethereum and Ripple are consolidating near key technical areas on Friday, showing mild signs of stabilization after recent volatility. BTC holds above $67,000 despite mild losses so far this week, while ETH hovers around $2,000 after a rejection near its upper consolidation boundary.

Changing the game: International implications of recent tariff developments

The Supreme Court ruling on International Emergency Economic Powers Act (IEEPA) tariffs provides limited relief for the rest of the world, with weighted average tariff rates modestly lower.

Starknet unveils strkBTC, shielded Bitcoin transactions on Ethereum Layer 2

Starknet, the Ethereum Layer 2 network developed by StarkWare, today announced strkBTC, a wrapped Bitcoin asset that introduces optional shielding while preserving full DeFi composability.