- The US dollar maintains profits against a weaker Loonie, after a four -day rally.
- Later, US ADP employment data and preliminary GDP figures will frame the Fed decision.
- The Bank of Canada is expected to keep the rates, but recent data point to greater relief before the end of the year.
The dollar stabilizes near the maximums against the Canadian dollar after a four -day rally, with investors watching from the band line before the monetary policy decisions of the Federal Reserve and the Canada Bank that will be published later in the day.
The pair is being negotiated just above 1,3770 during the early European session on Wednesday, consolidating profits after an increase of almost 1.5% since the minimum of last week in 1,3575. The solid macroeconomic data of the US and the commercial agreements between the US and some of its main business partners have restored confidence in the US dollar.
US ADP employment and GDP will frame the Fed decision
The US Jolts job offers data suggested that the labor market is cooling, and investors will be attentive to the ADP report, which will be published later in the day, to confirm that vision.
Also on Wednesday, the US preliminary GDP is expected to show that the US economy experienced significant recovery, showing anuced growth of 2.4% after the contraction of 0.5% observed in the previous quarter.
Suppose these figures are confirmed and that the ADP complies with market forecasts and shows a significant rebound in June. In that case, the Fed could have more reasons to maintain interest rates without changes until the economic consequences of Trump tariffs are evident.
The Bank of Canada is expected to also keep the rates without changes, but the fundamental context is quite different in this case. Inflation is maintained below 2%, and the labor market has weakened, which could lead to the bank to adopt a “moderate maintenance” that would increase the negative pressure on the loonie.
Economic indicator
Fed interest rates decision
The Federal Reserve (Fed) Delibera on monetary policy and makes a decision on interest rates in eight preprogrammed meetings per year. It has two mandates: maintain inflation in 2% and maintain full employment. Its main tool to achieve this is to establish interest rates, both to those that it lends to banks and to those that banks lend each other. If you decide to raise the fees, the US dollar (USD) tends to strengthen since it attracts more foreign capital tickets. If the rates lower, it tends to weaken the USD since capital is drained towards countries that offer greater returns. If the rates remain unchanged, the attention focuses on the tone of the Federal Open Market Committee (FOMC), and if it is a hard line (expectancy of higher interest rates in the future) or moderate (expectation of lower rates in the future).
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Next publication:
LIE Jul 30, 2025 18:00
Frequency:
Irregular
Dear:
4.5%
Previous:
4.5%
Fountain:
Federal Reserve
Economic indicator
Decision of the interest rate of the Bank of Canada (Boc)
He Bank of Canada (BOC) announces his decision on interest rates at the end of his eight meetings scheduled per year. If the Boc believes that inflation will be above the target (hard line), it will increase interest rates to reduce it. This is up to CAD, since higher interest rates attract greater foreign capital entries. Similarly, if Boc sees that inflation falls below the objective (Dovish), it will reduce interest rates to give an impulse to the Canadian economy in the hope that inflation will rise again. This is bassist for the CAD, since it deteries the entry of foreign capital into the country.
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Next publication:
LIE Jul 30, 2025 13:45
Frequency:
Irregular
Dear:
2.75%
Previous:
2.75%
Fountain:
Bank of Canada
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
