USD/CAD advances to near 1.3800 despite improved risk sentiment, Fed decision awaited
USD/CAD rises as investors adopt a cautious stance ahead of the Fed interest rate decision.
US Treasury Secretary Bessent and Trade Representative Greer are set to meet with Chinese Vice Premier He Lifeng in Geneva.
Risk sentiment improved following a joint press conference between Canadian PM Mark Carney and US President Donald Trump.
USD/CAD is recovering its losses registered in the previous session, trading around 1.3790 during the Asian hours on Wednesday. The US Dollar (USD) is gaining strength as investors adopt a cautious stance ahead of the Federal Reserve's (Fed) interest rate decision due later in the North American session.
While the Fed is widely expected to leave rates unchanged, market focus remains on Chair Jerome Powell’s comments, particularly in light of ongoing tariff uncertainties and mounting political pressure from President Trump for rate cuts.
US Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer will meet Chinese Vice Premier He Lifeng in Geneva this weekend, marking the first high-level dialogue since US-imposed tariffs intensified global trade tensions. China's Ministry of Commerce confirmed participation after evaluating US proposals and factoring in national interests, global sentiment, and domestic industry input.
On the other hand, the USD/CAD pair faced headwinds as the Canadian Dollar (CAD) found support amid improved risk sentiment following a joint press conference between Canadian Prime Minister Mark Carney and a visibly tense US President Donald Trump. Carney later held a solo briefing, clarifying the tone of initial US-Canada trade discussions.
"The talks were constructive," Carney noted. "President Trump and I agreed to resume discussions in the coming weeks, with a follow-up meeting at the G7. While no decisions were made on tariffs today, both sides are committed to moving forward."
However, domestic data remains a concern for the CAD. Canada’s seasonally-adjusted Ivey PMI for April fell sharply below expectations, dropping to 48.0 versus a forecast of 51.2, signaling deteriorating business sentiment.
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