USD/CAD hovers near 1.3700 as New Year’s Eve approaches
USD/CAD Holds Steady Near 1.3700 in Asian Markets
During Wednesday’s Asian session, the USD/CAD pair remains confined within a narrow band close to 1.3700. Trading activity is subdued as the market enters the final trading day of 2025, leading to limited price movement for the Loonie pair.
At the time of reporting, the US Dollar Index (DXY)—which measures the Greenback against a basket of six major currencies—has edged up to approximately 98.26, marking its highest point in a week.
The US Dollar experienced a notable surge on Tuesday. This rise came despite the Federal Open Market Committee (FOMC) releasing minutes from its December meeting, which indicated that most policymakers are open to additional interest rate reductions if inflation continues to ease following the December cut.
According to the FOMC minutes, “Most participants judged further rate cuts would likely be appropriate if inflation declined over time as expected.”
Recent Consumer Price Index (CPI) figures revealed that headline inflation slowed to 2.7% year-over-year in November, down from 3% recorded in September.
On the other hand, the Canadian Dollar (CAD) is trading with little volatility, as investors anticipate that the Bank of Canada (BoC) will maintain its current interest rates in the near future. This outlook is supported by inflation consistently hovering around the BoC’s 2% target in recent months, reinforcing expectations that the central bank will keep rates unchanged for now.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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