USD/CAD Slides Below 1.3700 as BoC Holds Rates, Weak US Data Hits Dollar

BoC Keeps Interest Rate Unchanged, Signals Dovish Outlook

The Bank of Canada left its benchmark interest rate unchanged as expected, citing continued progress on inflation. However, policymakers hinted at the possibility of easing in the coming months. This dovish stance has pressured the Canadian dollar less than the US dollar, allowing USD/CAD to move lower.

📈 Read more on BoC Rate Decisions

US Dollar Weakens on Disappointing Economic Reports

Adding to USD/CAD’s downside, US economic data released Wednesday fell short of expectations:

1. ISM Services PMI

• May reading: 49.9
• April reading: 51.6
• Forecast: 52.0
  This marks the first contraction in nearly a year and signals slowing business activity in the US services sector.

2. ADP Private Employment Data

• May jobs added: 37,000
• April (revised): 60,000
• Forecast: 115,000
  This sharp miss raises concerns about labor market weakness ahead of Friday's Nonfarm Payrolls report.

Market Outlook: Focus Shifts to Trade and Jobless Claims Data

Markets now turn their attention to upcoming data releases later today:

• US Balance of Trade
• Weekly Initial Jobless Claims

Both figures will provide further clues on the state of the US economy and could influence the next directional move in USD/CAD.

Stay up to date with the Forex Economic Calendar

Conclusion: Bearish Pressure on USD/CAD Persists

With both the Bank of Canada and US economic data pointing toward dovish policy and slowing growth, USD/CAD is likely to remain under pressure in the short term. The pair’s next direction will depend heavily on upcoming US macroeconomic releases.