The Canadian dollar has been treading water against the US dollar after descending to a 2 ½ year low. Action in the USD/CAD pairing has been muted both overnight and into the morning, with investors on the edge of their seats awaiting the Fed’s rate decision. While there’s widespread agreement among Fed enthusiasts that a pause is on the cards, intrigue lies in the post-announcement statement and press conference. All ears will be tuned in to see if Fed Chair Powell gives the ‘rate hikes are not off the table’ declaration a bit more oomph than usual.
There’s widespread speculation about the exact tone of the Fed’s impending statement. If it carries an especially hawkish tone, it might hint that another rate hike could still be possible in December, potentially pushing the USD/CAD above the 1.39 mark. However, if the hawkishness is subdued, market watchers might interpret this as a sign of the Fed easing into a more dovish approach, which could temper the US dollar’s strength.
The Canadian dollar is currently trading at 1.3871 CAD against the US Dollar.
