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
Silver Price Forecast: XAG/USD extends bull run to near $72.70 as Fed dovish bets remain steadySilver price (XAG/USD) rallies further to near $72.70 during the early European trading session on Wednesday.
Author  FXStreet
2 hours ago
Silver price (XAG/USD) rallies further to near $72.70 during the early European trading session on Wednesday.
placeholder
Will ETH, BNB, XRP, SOL and DOGE Outperform in a 2026 Altseason?The cryptocurrency market showed selective altcoin outperformance in 2025, with Bitcoin maintaining a high dominance, suggesting continued investor preference for BTC.
Author  Mitrade
22 hours ago
The cryptocurrency market showed selective altcoin outperformance in 2025, with Bitcoin maintaining a high dominance, suggesting continued investor preference for BTC.
placeholder
Bitcoin Poised For ‘Boring’ 2025 Close – Here’s When BTC’s Real Test Will ComeAfter failing to turn the $90,000 area, Bitcoin (BTC) continues to move within its local range with apparent no clear direction. Some market observers have suggested that the flagship crypto will
Author  NewsBTC
6 hours ago
After failing to turn the $90,000 area, Bitcoin (BTC) continues to move within its local range with apparent no clear direction. Some market observers have suggested that the flagship crypto will
placeholder
Bitcoin Poised for Gains as Record $24B Options Expiry Removes Price CapBitcoin is predicted to potentially hit $100,000 following a significant options expiry valued at $23.7 billion.
Author  Mitrade
2 hours ago
Bitcoin is predicted to potentially hit $100,000 following a significant options expiry valued at $23.7 billion.
placeholder
Markets in 2026: Will gold, Bitcoin, and the U.S. dollar make history again? — These are how leading institutions thinkAfter a turbulent 2025, what lies ahead for commodities, forex, and cryptocurrency markets in 2026?
Author  Insights
2 hours ago
After a turbulent 2025, what lies ahead for commodities, forex, and cryptocurrency markets in 2026?
goTop
quote