As the likelihood of further Fed rate decreases declines, the USD/CAD exchange rate stays stable.
Another rate cut in December is far from certain, according to Fed Chair Powell.
The BoC signaled the end of its policy easing, which might help the Canadian dollar.
After showing gains in the previous session, the USD/CAD pair is still stable, trading around 1.3980 on Friday during Asian hours. As the US Dollar (USD) gained strength following remarks by Federal Reserve (Fed) Chair Jerome Powell that reduced prospects for additional interest rate decreases, the pair gained value.
By a vote of 10–2, the US Fed lowered its benchmark rate by 25 basis points on Wednesday, bringing it down to a range of 3.75%–4.0%. There was disagreement over the decision; Kansas City Fed President Jeffrey Schmid voted to maintain rates at their current level, while Fed Governor Stephen Miran favored a more significant 50 basis point drop.
Due to a lack of data available during the ongoing US government shutdown, Fed Chair Jerome Powell stated that the central bank is finding it difficult to manage its dual mandate of boosting employment and controlling inflation. Powell warned that until official data reporting resumes, officials might need to take a wait-and-see stance. The picture is still unclear, he added, adding that another rate cut in December is far from probable.
The Canadian dollar (CAD) may gain strength from indications that the Bank of Canada (BoC) may be finishing its policy easing cycle, which could put pressure on the USD/CAD pair. The BoC reduced its policy rate to 2.25% by reducing its interest rate by 25 basis points. The central bank hinted that the most recent decrease might mark the end of its easing cycle by describing this level as "about right assuming inflation and activity progress as predicted."
Another rate cut in December is far from certain, according to Fed Chair Powell.
The BoC signaled the end of its policy easing, which might help the Canadian dollar.
After showing gains in the previous session, the USD/CAD pair is still stable, trading around 1.3980 on Friday during Asian hours. As the US Dollar (USD) gained strength following remarks by Federal Reserve (Fed) Chair Jerome Powell that reduced prospects for additional interest rate decreases, the pair gained value.
By a vote of 10–2, the US Fed lowered its benchmark rate by 25 basis points on Wednesday, bringing it down to a range of 3.75%–4.0%. There was disagreement over the decision; Kansas City Fed President Jeffrey Schmid voted to maintain rates at their current level, while Fed Governor Stephen Miran favored a more significant 50 basis point drop.
Due to a lack of data available during the ongoing US government shutdown, Fed Chair Jerome Powell stated that the central bank is finding it difficult to manage its dual mandate of boosting employment and controlling inflation. Powell warned that until official data reporting resumes, officials might need to take a wait-and-see stance. The picture is still unclear, he added, adding that another rate cut in December is far from probable.
The Canadian dollar (CAD) may gain strength from indications that the Bank of Canada (BoC) may be finishing its policy easing cycle, which could put pressure on the USD/CAD pair. The BoC reduced its policy rate to 2.25% by reducing its interest rate by 25 basis points. The central bank hinted that the most recent decrease might mark the end of its easing cycle by describing this level as "about right assuming inflation and activity progress as predicted."
