USD/CAD Holds Above 1.3650 as Investors Await Fed Rate Decision

USD/CAD Holds Firm Above 1.3650 Ahead of Fed Policy Announcement

USD/CAD inches lower, trading around 1.3660 during the Asian session as the US Dollar weakens ahead of the Federal Reserve’s interest rate decision scheduled for Wednesday. Investors remain cautious amid persistent geopolitical tensions and tariff uncertainties.

Fed Expected to Maintain Interest Rates; Rate Cuts Anticipated in Fall

The US Federal Reserve is widely expected to keep interest rates unchanged at 4.5% in the June meeting, with the market pricing nearly an 80% chance of rate cuts in September and October, according to Reuters. The Federal Open Market Committee (FOMC) monetary policy statement will be closely analyzed for forward guidance.

Economic Data Influences Market Sentiment

US economic data released recently showed a sharper-than-expected decline in Retail Sales, which fell 0.9% in May, surpassing the forecasted 0.7% drop. Additionally, Industrial Production contracted by 0.2%, reversing the previous increase. Market participants are also watching key reports on Initial Jobless Claims, Housing Starts, and Building Permits due Wednesday.

Canadian-US Cooperation on Economic and Security Fronts

Canadian Prime Minister Carney and US President Trump have committed to negotiating a new economic and security agreement within 30 days, potentially impacting trade and market dynamics between the two countries.

Suggested Internal Links (Tredu.com):

• USD/CAD Forecast and Analysis
• Fed Interest Rate Decision Impact on Forex
• US Economic Data and Market Reactions
• Canada-US Trade and Security Relations