The USD/CAD pair has regained some ground during Wednesday’s Asian session, trading around 1.3790. This recovery comes as the US Dollar (USD) strengthens, with investors adopting a cautious stance ahead of the Federal Reserve’s (Fed) interest rate decision later in the North American session.
While the Fed is expected to leave rates unchanged, market focus will be on Chair Jerome Powell’s remarks, especially amid tariff uncertainties and increasing political pressure from President Trump for rate cuts. Additionally, high-level US-China trade talks, set to occur this weekend in Geneva, are also weighing on market sentiment. US Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer will meet Chinese Vice Premier He Lifeng, marking the first major discussions since the US tariffs escalated global trade tensions. China’s Ministry of Commerce confirmed its participation, signaling a willingness to negotiate after evaluating US proposals and considering domestic and global factors.
On the Canadian Dollar side, the USD/CAD pair has faced headwinds due to some positive developments for the CAD. A joint press conference between Canadian Prime Minister Mark Carney and US President Donald Trump saw Carney express optimism, noting that the talks were “constructive” and that both sides are committed to continuing discussions, with a follow-up meeting scheduled at the G7 summit.
However, domestic data remains a concern for the CAD. Canada’s seasonally-adjusted Ivey PMI for April fell significantly below expectations, dropping to 48.0 from a forecast of 51.2. This decline signals weakening business sentiment in Canada, potentially limiting the Canadian Dollar’s upside in the near term.
As markets await the Fed’s decision, the USD/CAD pair remains sensitive to both domestic Canadian data and global trade developments, with any surprises likely to influence the currency pair’s next move.
Related Topics:
