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
GBP: UK Budget in focus as chancellor Reeves speaks – INGIt’s a big day for the UK and the pound. Chancellor Rachel Reeves is expected to deliver her budget address at 12.30 GMT.
Author  FXStreet
7 hours ago
It’s a big day for the UK and the pound. Chancellor Rachel Reeves is expected to deliver her budget address at 12.30 GMT.
placeholder
Texas takes advantage of the Bitcoin dip, acquiring $5 million in BlackRock's IBITWhile Texas advances its Bitcoin initiatives, discussions about potentially including Ethereum are underway, contingent on market performance.
Author  Mitrade
11 hours ago
While Texas advances its Bitcoin initiatives, discussions about potentially including Ethereum are underway, contingent on market performance.
placeholder
Bitcoin Price Rebound Gains Traction with $90K Break in SightBitcoin is trading above $87,000 and its 100-hour SMA after rebounding from $83,500, with a bearish trend line at $88,200 and resistance at $89,000–$90,000 now in focus as BTC either breaks higher toward $91,750–$94,000 or slips back toward $86,700, $85,000 and lower supports.
Author  Mitrade
14 hours ago
Bitcoin is trading above $87,000 and its 100-hour SMA after rebounding from $83,500, with a bearish trend line at $88,200 and resistance at $89,000–$90,000 now in focus as BTC either breaks higher toward $91,750–$94,000 or slips back toward $86,700, $85,000 and lower supports.
placeholder
NZD/USD jumps above 0.5650 as RBNZ cuts OCR to 2.25%The NZD/USD pair climbs to near 0.5665 during the early Asian session on Wednesday. The New Zealand Dollar (NZD) strengthens against the US Dollar (USD) following the Reserve Bank of New Zealand (RBNZ) interest rate decision. 
Author  FXStreet
15 hours ago
The NZD/USD pair climbs to near 0.5665 during the early Asian session on Wednesday. The New Zealand Dollar (NZD) strengthens against the US Dollar (USD) following the Reserve Bank of New Zealand (RBNZ) interest rate decision. 
placeholder
Fed Officials Speak Out in Force to Back Rate Cut! December Cut Now a Done Deal? Will the FOMC Meeting Be Delayed?TradingKey - San Francisco Federal Reserve President Mary Daly has voiced support for a rate cut at next month's meeting, citing the greater likelihood and harder-to-manage risk of a sudden deteriorat
Author  TradingKey
Yesterday 10: 11
TradingKey - San Francisco Federal Reserve President Mary Daly has voiced support for a rate cut at next month's meeting, citing the greater likelihood and harder-to-manage risk of a sudden deteriorat
goTop
quote