Canadian Dollar spins in place as Fed rate call looms
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The Canadian Dollar (CAD) struggled to find momentum on Tuesday, holding steady against an equally-sluggish US Dollar (USD) as investors brace for the last Federal Reserve (Fed) interest rate decision of the year. A third straight interest rate cut is functionally a foregone conclusion, but investors will be tuning in to see both changes to the Fed’s Summary of Economic Projections (SEP), as well as any tonal shifts in one of Fed Chair Jerome Powell’s last interest rate decision pressers before the end of his term. Outside of potential market upheaval from any abrupt shifts in Fed policy rhetoric, Canadian Dollar markets will be keeping a close eye on trade war developments with the Trump administration. US President Donald Trump revealed his plans to deliver $12 billion in extra agricultural support for battered American farmers, who continue to be the worst-hit victims of his global trade war aspirations. President Trump also doubled down on expressing his frustration at his own inability to force Canada into a disadvantageous trade position, threatening fresh tariffs on US companies that import Canadian fertilizer products, which are again overwhelmingly US farmers. The American farming industry is singularly dependent on Canadian fertilizer suppliers, rendering the policy shift a uniquely problematic way to gain the upper hand in trade talks with Canada, which remains leery of engaging in trade talks with the Trump administration ever since Trump began threatening to blow up his own bespoke trade deal that he forcibly renegotiated with Canada and Mexico during his first term. Daily digest market movers: Canadian Dollar momentum remains low as markets brace for Fed Canadian Dollar remains trapped in a pre-Fed holding pattern, keeping USD/CAD price action capped near 1.3850. The Canadian Dollar gained ground sharply over a two-week period, climbing 2.3% bottom-to-top after falling to seven-month lows…
Filed under: News - @ December 9, 2025 10:24 pm