USD/CAD remains under pressure above 1.3500, Canadian GDP, Fed rate decision eyed

Source Fxstreet
  • USD/CAD trades in negative territory for the fourth consecutive day, near 1.3410.
  • Economists expect the first rate cut to occur in May or June, though a cut at the Fed’s March meeting is not off the table.
  • Canada is expected to see a slight expansion in November GDP growth numbers.

The USD/CAD pair remains under selling pressure during the early Asian trading hours on Tuesday. Canada’s Gross Domestic Product (GDP) for November will be due on Wednesday, which is forecast to expand by 0.1% MoM. The attention will shift to the Federal Open Market Committee (FOMC) meeting on Wednesday, with no change in rate expected. At press time, USD/CAD is trading at 1.3510, down 0.01% for the day.

The US Core Personal Consumption Expenditures Price Index (PCE) for December, the Fed’s preferred inflation gauge, rose by 0.2% on the month from 0.1% in the previous reading and increased by 2.9% on a yearly basis from the previous reading of 3.2%. On Monday, the US Dallas Fed Manufacturing Business Index for January came in at -27.4 versus -10.4 prior. The Federal Reserve (Fed) will announce its interest rate decision on Wednesday. Most economists expect the first rate cut to occur in May or June, though a cut at the Fed’s March meeting is not off the table.

Apart from this, the rising geopolitical tensions in the Middle East might boost the safe haven currency like the Greenback. Early Tuesday, Sky News reported that US President Joe Biden is likely to authorize US military action in the Middle East as early as Monday night after three American troops were killed and dozens more were injured in an overnight drone strike in northeast Jordan near the Syrian border on Friday.  

On the Loonie front, Canada is expected to see a slight expansion in November GDP growth numbers. The GDP figure is projected to grow by 0.1% compared to the flat 0.0% in October. Meanwhile, a rise in oil prices might lift the commodity-linked Loonie and act as a headwind for the USD/CAD pair. 

Market participants will closely watch the Fed’s upcoming rate decision and monetary policy statement at 19:00 GMT on Wednesday. Traders will take cues from the press conference and find trading opportunities around the USD/CAD pair.



 

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
EUR/USD wobbles ahead of US NFP reportEUR/USD steadies in a tight range around 1.0400 in Friday’s European session as the US Dollar (USD) trades cautiously ahead of the United States (US) Nonfarm Payrolls (NFP) data for January, which will be published at 13:30 GMT.
Author  FXStreet
Yesterday 10: 17
EUR/USD steadies in a tight range around 1.0400 in Friday’s European session as the US Dollar (USD) trades cautiously ahead of the United States (US) Nonfarm Payrolls (NFP) data for January, which will be published at 13:30 GMT.
placeholder
January NFP Preview: Divergent Employment Outlook – Can Gold’s New Highs Be Sustained?TradingKey - As the first nonfarm payrolls (NFP) report of 2025 approaches, the Federal Reserve’s rate cut prospects and markets such as gold and U.S. stocks face a critical test. Following unexpected
Author  TradingKey
Yesterday 10: 16
TradingKey - As the first nonfarm payrolls (NFP) report of 2025 approaches, the Federal Reserve’s rate cut prospects and markets such as gold and U.S. stocks face a critical test. Following unexpected
placeholder
Net Profit Doubles, Yet Stock Plummets—Is Amazon’s Q4 Earnings Report Really That Bad?TradingKey - On Thursday, February 7, tech giant Amazon (AMZN.US) released a mixed Q4 2024 earnings report after the market close. While revenue and profits exceeded expectations, disappointing guidan
Author  TradingKey
Yesterday 10: 13
TradingKey - On Thursday, February 7, tech giant Amazon (AMZN.US) released a mixed Q4 2024 earnings report after the market close. While revenue and profits exceeded expectations, disappointing guidan
placeholder
Gold edges higher ahead of US NFP reportGold’s price (XAU/USD) edges higher and trades back up near $2,865 at the time of writing on Friday after its rather sluggish performance the previous day.
Author  FXStreet
Yesterday 10: 12
Gold’s price (XAU/USD) edges higher and trades back up near $2,865 at the time of writing on Friday after its rather sluggish performance the previous day.
placeholder
Pound Sterling flattens against USD ahead of US NFPThe Pound Sterling (GBP) ticks lower to near 1.2420 against the US Dollar (USD) in Friday’s European session ahead of the United States (US) Nonfarm Payrolls (NFP) data for January, which will be published at 13:30 GMT.
Author  FXStreet
Yesterday 08: 24
The Pound Sterling (GBP) ticks lower to near 1.2420 against the US Dollar (USD) in Friday’s European session ahead of the United States (US) Nonfarm Payrolls (NFP) data for January, which will be published at 13:30 GMT.
Related Instrument
goTop
quote