Usdcad Trades With Bearish Bias

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Usdcad Trades With Bearish Bias

Usd/Cad Trades Below 1.3600 With Bearish Bias

USD/CAD experienced a fresh bout of selling on Wednesday and is now trading below the 1.3600 level. Overall, the USD/CAD pair is down by 0.10% for the day, while the rest of the trading day is still left.

Despite the bearish bias in the short-term, the USD/CAD is trading in a tight range that was established last week. The investors of USD/CAD are also awaiting the central bank decision that will be coming later today for more clarity.

Markets Await Fomc Decision

The FOMC policy decision will be coming later today, with a high chance that the central bank will officially start its rate-cutting cycle. Other than that, the market is now also looking at the recent CPI and its implications for the Fed's decision.

The Fed will also share the updated dot plot, which could provide insights into the timing of the next rate cuts. As such, the upcoming events will have a major impact on the USD/CAD.

few weeks back, the odds of a 50 bps rate cut were very low, but that has changed with the recent economic data, including the US CPI. Especially, the recent US retail sales data was very upbeat which also stopped the USD recovery right on the tracks.

The recent upbeat retail sales have eased the concerns that the US economy is going through a slowdown. However, the markets are still worried that the higher rates are not good for the economy.

For now, it seems that the USD/CAD doesn't have a lot of potential to go down. After all, there are rumors that the BoC (Bank of Canada) will be delivering a deeper rate cut next month.

This was reaffirmed by the data which showed that inflation in Canada has reached the 2% target of BoC. With the inflation back in the comfortable range, there's no reason to punish the economy with higher rates.

Also, the Crude Oil prices have registered a modest downtick, which could also affect the CAD negatively. However, this will provide some upside to the USD/CAD.

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