In the North American session on Monday, the USD/CAD pair hovers near the 1.4400 mark. The US dollar has been trading in a subdued manner with light volumes, leading to a slight downward tick in the pair. The US Dollar Index, which measures the dollar’s value against six major currencies, is lingering around 108.00.
The Federal Reserve has indicated a lower number of expected interest rate cuts for the upcoming year. This comes as investors factor in the potential economic policies of the newly elected Republican Donald Trump, who is anticipated to implement measures such as tightening immigration controls, increasing import tariffs, and lowering taxes. Despite the dollar’s slight decline on Monday, it is poised to close the year with a 6.7% gain, much of which accrued in the last three months as investors priced in strong growth and higher inflation in the US economy for 2025.
Meanwhile, the Canadian dollar’s outlook remains lackluster. The Bank of Canada is expected to further reduce interest rates to mitigate the risk of inflation falling below its 2% target. The BoC has already cut its key borrowing rate by 175 basis points to 3.75% this year. As the market braces for the New Year, the USD/CAD pair continues to be influenced by these various factors, with its performance closely watched by investors.
Related topics:
EUR/USD Price Analysis: A Modest Uptick with Resistance Looming
Yen Weakness Bolsters Japanese Shares Amid Mixed Global Market Sentiment
China’s Industrial Profits Decline Moderates as Leaders Pledge Economic Support
