USD/CAD Rebounds Above 1.4300 as Traders Await Fed Decision

The USD/CAD has risen above the 1,4300 mark as investors anticipate the Federal Reserve decision.

The USD/CAD pair rebounded above the 1.4300 mark after reaching a two-week low recently. The trading community is realigning their holdings in anticipation of the Federal Reserve’s policy declaration. There was an uptick in the value of the U.S. dollar from its multi-month lows that boosted the pair’s performance; however, the Canadian dollar continues to face downward pressure due to falling oil prices.

Most experts anticipate that the Federal Reserve will maintain interest rates in the range of 4.25% to 4.50%. The key attention in the market will be on the forecasts and remarks from Fed Chair Jerome Powell as any indications regarding potential rate adjustments could lead to fluctuations in currency markets.

February’s report on inflation in Canada revealed an increase to 2.6%, which is the highest it has been in eight months. This could dampen speculation against the dollar as it increases the likelihood of the Bank of Canada adopting a more aggressive stance.

The value of the Canadian dollar is still significantly influenced by oil prices, despite decreases that have somewhat constrained its growth potential. Nonetheless, concerns about interruptions in supply due to geopolitical tensions have been preventing major losses from occurring.

Traders are getting ready for the Fed’s announcement and should anticipate fluctuations in USD/CAD exchange rates. Any changes in market sentiment or adjustments in interest rate forecasts could lead to movements in prices.