- USD/CAD rises near 1.3750 on BoC policy in focus.
- Canadian Dollar Weakens Amid Multiple Headwinds
- US Dollar Loses Ground Ahead of Busy Week of US Data
The USD/CAD pair is up near 1.3750 in the European session on Monday after recovering its intraday losses. The pair is strengthening as the Canadian dollar is weakening due to a sharp correction in oil prices and uncertainty ahead of the Bank of Canada (BoC) interest rate policy, scheduled for Wednesday.
West Texas Intermediate (WTI) futures on NYMEX fell near $78.30 amid uncertainty over China’s economic outlook. Investors are concerned that the Chinese economy will struggle to find a firm footing due to weak domestic demand. The economy grew at a slower pace than expected in the second quarter of this year.
It is worth noting that Canada is the main supplier of oil to the United States (US) and higher oil prices support the Canadian dollar.
On the monetary policy front, investors expect the BoC to make subsequent rate cuts on Wednesday. The BoC is expected to cut interest rates again by 25 basis points (bps) to 4.5% due to easing price pressures and cooling labor market conditions.
Meanwhile, the US Dollar (USD) has been gradually correcting as US President Joe Biden’s withdrawal from re-election bid has induced political uncertainty. The US Dollar Index (DXY), which tracks the value of the Greenback against six major currencies, is down near 104.20.
This week, the US Dollar will be guided by a series of US economic data, which will provide clues as to when the Federal Reserve (Fed) will start cutting interest rates this year.
Economic indicator
BOC interest rate decision
He Bank of Canada The Bank of Canada announces the interbank interest rate. This rate affects a range of interest rates set by commercial banks, building societies and other institutions for their own borrowers and depositors. It also affects exchange rates. If the Bank of Canada is firm on the economy’s inflationary outlook and raises rates, this is bullish for the Canadian dollar, while an outlook for a reduction in inflationary pressures is bearish.
Next post:
Wed Jul 24, 2024 1:45 PM
Frequency:
Irregular
Dear:
4.5%
Previous:
4.75%
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.
