USD/CAD holds losses below 1.3950 as Fed policymakers lean toward dovish stance
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USD/CAD loses ground after two days of gains, trading around 1.3940 during the Asian hours on Thursday. The pair depreciates as the US Dollar (USD) loses ground after the latest Federal Open Market Committee (FOMC) Minutes from the September meeting suggested policymakers are leaning toward further rate cuts this year. Most policymakers judged it would likely be appropriate to ease policy further over the remainder of 2025. Some members noted financial conditions suggested policy may not be particularly restrictive. Most participants judged downside risks to employment to have increased, while upside risks to inflation had either diminished or not increased. The US government shutdown entered its ninth day with no sign of progress, as the Senate on Wednesday once again rejected competing funding proposals from Republicans and Democrats to end the stalemate. US President Donald Trump on Tuesday pledged to treat Canada fairly in discussions over the US tariffs on Canadian goods, but appeared less certain about reaching a broader trade deal that includes Mexico. President Trump said in the Oval Office ahead of a meeting with Canada’s Prime Minister Mark Carney, that “I think they’re going to walk away very happy.” “We’re going to treat people fairly. We’re going to especially treat Canada fairly,” He added. Carney, making his second visit to the White House in five months, faces growing pressure to address US tariffs on steel, autos, and other goods, per Reuters. The Bank of Canada (BoC) decided to reduce its overnight policy rate by 25 basis points to 2.50% in September, its first reduction after a six-month pause. This cited a weakening economy, easing inflation pressures, and softening labor market conditions. The next policy announcement is scheduled for October 29. Canadian Dollar FAQs The key factors driving the Canadian Dollar (CAD) are the level of interest rates…
Filed under: News - @ October 9, 2025 3:27 am