USD/CAD strengthens to around 1.3695 in Thursday’s early Asian session.
Fed officials voted to hold the benchmark federal funds rate steady at its June meeting on Wednesday.
Trump will discuss his advisers on the Israel-Iran conflict but is undecided on a US strike.
The USD/CAD pair trades in positive territory for the third consecutive day near 1.3695 during the early Asian session on Thursday. The US dollar (USD) edges higher against the Canadian Dollar (CAD) after the Federal Reserve (Fed) kept interest rates unchanged at the June policy meeting. Investors will closely monitor the Middle East conflict as tensions continue.
The Federal Open Market Committee (FOMC) voted unanimously on Wednesday to leave the interest rate unchanged in a range of 4.25%-4.50%. Fed officials continued to pencil in two interest-rate reductions in 2025, though new projections showed a growing divide among policymakers.
Fed officials expect US President Donald Trump’s tariff policies could weigh on economic activity and put upward pressure on prices. Policymakers raised their median estimate for inflation at the end of 2025 to 3.0% from 2.7%, while revising their forecast for economic growth in 2025 to 1.4% from 1.7%. Fed officials forecast an Unemployment Rate of 4.5% by the end of the year, up slightly from their previous estimate.
Investors remain focused on the conflicts between Israel and Iran, which boost the safe-haven flows, supporting the Greenback. Trump said on Wednesday that he would hold another meeting Wednesday to discuss the conflict in the Middle East, but he had not made a final decision on whether the US plans to join Israel’s offensive aimed at destroying Iran’s nuclear enrichment program.
Meanwhile, a rise in Crude Oil prices might lift the commodity-linked Loonie and cap the upside for the pair. It’s worth noting that Canada is the largest oil exporter to the US, and higher crude oil prices tend to have a positive impact on the CAD value.
* The content presented above, whether from a third party or not, is considered as general advice only. This article should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments.
