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
Gold price slips below $3,300 amid weak US data, set for over 5% monthly gainsGold fell some 0.69% during the North American session on Wednesday after hitting a daily high of $3,328. Data from the United States (US) revealed an economic contraction and fueled speculation for further interest rate cuts by the Federal Reserve (Fed).
Author  FXStreet
May 01, 2025
Gold fell some 0.69% during the North American session on Wednesday after hitting a daily high of $3,328. Data from the United States (US) revealed an economic contraction and fueled speculation for further interest rate cuts by the Federal Reserve (Fed).
placeholder
Gold Price Forecast: XAU/USD climbs to near $4,350 on Fed rate cut bets, geopolitical risks Gold price (XAU/USD) rises to near $4,345 during the early Asian session on Friday. Gold finished 2025 with a significant rally, achieving an annual gain of around 65%, its biggest annual gain since 1979.
Author  FXStreet
Jan 02, Fri
Gold price (XAU/USD) rises to near $4,345 during the early Asian session on Friday. Gold finished 2025 with a significant rally, achieving an annual gain of around 65%, its biggest annual gain since 1979.
placeholder
Ethereum Price Forecast: Accumulation addresses post record inflows in December despite high selling pressureEthereum (ETH) accumulation addresses recorded their highest monthly inflow in December 2025 as the year came to a close. Despite the weak market momentum following the holidays, these wallets doubled down on their buying pressure, adding 3.62 million ETH to their cumulative balance.
Author  FXStreet
Yesterday 02: 11
Ethereum (ETH) accumulation addresses recorded their highest monthly inflow in December 2025 as the year came to a close. Despite the weak market momentum following the holidays, these wallets doubled down on their buying pressure, adding 3.62 million ETH to their cumulative balance.
placeholder
Malaysian doctor loses RM529,200 in crypto scam — then gets hit again by fake “fund recovery” pitch A 67-year-old Malaysian doctor lost RM529,200 after a crypto “investment” pitch on TikTok and a second fake “fund recovery” scheme, Perak police said, warning of rising multi-stage fraud tactics.
Author  Mitrade
19 hours ago
A 67-year-old Malaysian doctor lost RM529,200 after a crypto “investment” pitch on TikTok and a second fake “fund recovery” scheme, Perak police said, warning of rising multi-stage fraud tactics.
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
3 hours ago
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.
goTop
quote