USD/CAD bounces back as Canadian Dollar weakens, US elections take center stage

Source Fxstreet
  • USD/CAD rebounds from 1.3900 as the Canadian Dollar weakens on expectations that the BoC will deliver another 50-bps interest rate cut.
  • The likelihood of tough competition between Kamala Harris and Donald Trump for presidential elections has weighed on the US Dollar.
  • The Fed is expected to cut interest rates by 25 bps on Thursday.

The USD/CAD pair recovers half of its intraday losses after discovering significant buying interest around the key support of 1.3900. The Loonie asset bounces back despite the US Dollar (USD) remaining vulnerable against its major peers, suggesting sheer weakness in the Canadian Dollar (CAD).

The CAD remains on the backfoot as the Bank of Canada (BoC) is expected to cut interest rates further in the last monetary policy meeting of the year in December. BoC Governor Tiff Macklem opened doors for another 50 basis points (bps) interest rate reduction in December.

“We’ve demonstrated we’re prepared to do a 50-basis-points cut if we think that’s appropriate. And if we think it’s appropriate to do it again, we’ll do it again,” Macklem told to Senate Committee on Wednesday. Macklem emphasized the need to lower interest rates unless he sees surprises from economic developments. The BoC also reduced its interest rates by 50 bps to 3.75% in its policy meeting in October.

For more interest rate guidance, investors will pay close attention to BoC's Summary of Deliberations and the minutes of the policy meeting of October, which will be published on Tuesday.

Meanwhile, the US Dollar faces intense selling pressure as recent United States (US) national polls have shown that there would be fierce competition between Democratic candidate Kamala Harris and former President Donald Trump for presidential elections on Tuesday. The US Dollar Index (DXY), which gauges Greenback’s value against six major currencies, tumbles to near 103.70.

This week, investors will also focus on the Federal Reserve (Fed) policy meeting, which is scheduled on Thursday. The Fed is expected to reduce interest rates by 25 bps to 4.50%-4.75%, according to the CME FedWatch tool.

Economic Indicator

BoC Summary of Deliberations

The Bank of Canada (BoC) publishes the Summary of Deliberations from its Governing Council about two weeks after its Interest Rate Decision meeting. The document provides insights into the BoC officials' discussions about their monetary policy decisions. The BoC started publishing this document in 2023. Despite its delayed publication, it can have some impact on the Canadian Dollar.

Read more.

Next release: Tue Nov 05, 2024 18:30

Frequency: Irregular

Consensus: -

Previous: -

Source: Bank of Canada

 

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
The dollar weakened, equities dipped, and gold hit record highsThe dollar weakened, equities fell, and gold set new records on Wednesday as investors waited for a Fed rate cut later in the day.
Author  Cryptopolitan
Sep 17, 2025
The dollar weakened, equities fell, and gold set new records on Wednesday as investors waited for a Fed rate cut later in the day.
placeholder
ECB Policy Outlook for 2026: What It Could Mean for the Euro’s Next MoveWith the ECB likely holding rates steady at 2.15% and the Fed potentially extending cuts into 2026, EUR/USD may test 1.20 if Eurozone growth proves resilient, but weaker growth and an ECB pivot could pull the pair back toward 1.13 and potentially 1.10.
Author  Mitrade
Dec 26, 2025
With the ECB likely holding rates steady at 2.15% and the Fed potentially extending cuts into 2026, EUR/USD may test 1.20 if Eurozone growth proves resilient, but weaker growth and an ECB pivot could pull the pair back toward 1.13 and potentially 1.10.
placeholder
My Top 5 Stock Market Predictions for 2026Five 2026 market predictions written in a native, news-style voice: AI’s winners and losers, broader sector leadership, dividend demand, valuation cooling as the Shiller CAPE sits at 39 (Dec. 31, 2025), and quantum-computing bursts—while keeping all original facts and numbers unchanged.
Author  Mitrade
Jan 06, Tue
Five 2026 market predictions written in a native, news-style voice: AI’s winners and losers, broader sector leadership, dividend demand, valuation cooling as the Shiller CAPE sits at 39 (Dec. 31, 2025), and quantum-computing bursts—while keeping all original facts and numbers unchanged.
placeholder
Silver Price Forecast: XAG/USD consolidates above $79.00; bearish bias intact ahead of FedSilver (XAG/USD) lacks a firm intraday direction and oscillates in a narrow range during the Asian session on Wednesday as traders opt to wait on the sidelines ahead of the crucial FOMC rate decision.
Author  FXStreet
Mar 18, Wed
Silver (XAG/USD) lacks a firm intraday direction and oscillates in a narrow range during the Asian session on Wednesday as traders opt to wait on the sidelines ahead of the crucial FOMC rate decision.
placeholder
Gold tumbles below $4,650 as inflation fears and liquidity squeeze weighGold price (XAU/USD) remains under selling pressure near $4,640 during the early Asian session on Friday. The precious metal extends the decline as soaring crude oil and energy prices, driven by the escalating US-Israeli war with Iran, reignite inflation fears.
Author  FXStreet
13 hours ago
Gold price (XAU/USD) remains under selling pressure near $4,640 during the early Asian session on Friday. The precious metal extends the decline as soaring crude oil and energy prices, driven by the escalating US-Israeli war with Iran, reignite inflation fears.
goTop
quote