Created
: 2025.02.19
- English
- English
- What's Myforex
- Share
- Use tools
- Get information
- What's New
- Help center
- About us
- Customer support
- Terms and policies
-
-
PortfolioShare your portfolio and performance in real time -
Events & contestsEvents and contests held by retail brokers around the world
-
-
Real-time spread comparisonCompare spreads of major retail brokers in real time -
Volatility analysisVisualize volatility as a measure of daily market activity -
Swap point comparisonCompare buy and sell swap values for each broker by symbol -
Market rates & chartsCheck prices for all instruments offered by each broker -
IndicatorsProviding in-house developed indicators for MT4/MT5 -
Trading calculatorsCalculation tools for each broker to help you trade
-
-
World FX newsLatest news on forex and cryptocurrencies from around the world -
Broker informationTrading information of retail brokers worldwide -
MetaTrader4/5 user guideUser guide collection for the latest MetaTrader4/5 -
Economic calendarRelease calendar for indicators from official sources of major economies
USD/CAD trades with caution as FOMC minutes take centre stage
World FX news
Breaking news
USD/CAD trades with caution as FOMC minutes take centre stage
New
2025.02.19 18:29
2025.02.19 18:29
2025.02.19 18:29
- USD/CAD trades cautiously below 1.4200 as investors await FOMC minutes for the January policy meeting.
- The Fed cuts its key borrowing rates by 100 bps in 2024.
- Canadian inflation accelerated in January, still it remained below BoC's target of 2%.
The USD/CAD pair trades subduedly below 1.4200 in Wednesday's European session. The Loonie pair is slightly down as the US Dollar (USD) ticks lower ahead of the Federal Open Market Committee (FOMC) minutes for the January policy meeting, which will be published at 19:00 GMT. The US Dollar Index (DXY), which tracks the Greenback's value against six major currencies, wobbles around 107.00.
Investors will pay close attention to the FOMC minutes to get cues about the monetary policy outlook. Meanwhile, Fed officials have been guiding a restrictive monetary policy stance until they see inflationary pressures resuming to their journey on the 2% path.
In the January meeting, the Fed left interest rates steady in the range of 4.25%-4.50% after reducing them by 100 basis points (bps) in the last three policy meetings of 2024.
Globally, the market sentiment is slightly favorable for risk-perceived assets even though fears of United States (US) President Donald Trump have renewed. On Tuesday, Trump threatened to impose 25% tariffs on all imports of automobiles, semiconductors, and pharmaceuticals. He didn't provide any timeline about when they get executed to offer some time to local manufacturers to pace up operating capacities.
Meanwhile, the Canadian Dollar (CAD) is broadly underperforming its peers even though inflationary pressures accelerated in January expectedly. On year, the Consumer Price Index (CPI) rose by 1.9% faster than 1.8% growth in December. Month-on-month inflation grew by 0.1% after deflating by 0.4% last month.
Hot Canadian CPI data is unlikely to restrict the Bank of Canada (BoC) from easing the monetary policy further. Despite an increase in inflation, it is still below the central bank's target of 2%.
US Dollar FAQs
The US Dollar (USD) is the official currency of the United States of America, and the 'de facto' currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world's reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed's 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed's weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
Last updated
: 2025.02.19
Related articles
AUD/JPY Price Analysis: Bears deepen losses as pair hits multi-week lows
2025.02.22 06:51Australian Dollar faces pressure after US PMI
2025.02.22 05:57US Dollar gains modestly despite PMI data disappointing
2025.02.22 03:44Mexican Peso weakens as GDP contracts in Q4, growth outlook dims
2025.02.22 03:07EUR/USD Price Analysis: Bulls lose momentum as pair faces rejection at 100-day SMA
2025.02.22 01:11GBP/USD slips after hitting record high past 100-day SMA
2025.02.22 00:21
FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.
Was this article helpful?
We hope you find this article useful. Any comments or suggestions will be greatly appreciated.
We are also looking for writers with extensive experience in forex and crypto to join us.
please contact us at [email protected].
Thank you for your feedback.
Thank you for your feedback.
Most viewed
Silver Price Forecast: XAG/USD slips 1.20% as bullish momentum fades below $33.00
Silver's price retreats on Friday and fails to capitalize on falling US yields.
New
2025.02.22 06:56AUD/JPY Price Analysis: Bears deepen losses as pair hits multi-week lows
The AUD/JPY cross continued its downward trajectory on Friday to around 94.80, posting sharp losses and breaking through key technical support levels.
New
2025.02.22 06:51Australian Dollar faces pressure after US PMI
The AUD/USD pair faces offers pressure near 0.6400 after the release of the United States (US) S&P Global PMI data for February.
New
2025.02.22 05:57Gold price holds near record highs, set for eight straight weekly gain
Gold price slides late on Friday, poised to end the week positively, accumulating eight straight weeks of gains that pushed the yellow metal to all-time highs of $2,954.
New
2025.02.22 05:48Dow Jones Industrial Average falls over 700 points on Friday
The Dow Jones Industrial Average (DJIA) backslid over 700 points on Friday, knocking lower around one and a half percent and touching the 43,500 level for the first time in over a month.
New
2025.02.22 04:01US Dollar gains modestly despite PMI data disappointing
The US Dollar Index (DXY), which tracks the US Dollar's performance against six major currencies, is holding on to minor gains on Friday, trading around 106.50.
New
2025.02.22 03:44Mexican Peso weakens as GDP contracts in Q4, growth outlook dims
The Mexican Peso (MXN) lost some ground against the US Dollar (USD) on Friday as the Mexican economy decelerated in the last quarter of 2024.
New
2025.02.22 03:07EUR/USD Price Analysis: Bulls lose momentum as pair faces rejection at 100-day SMA
The EUR/USD pair faced a setback on Friday, declining by 0.44% to settle near 1.0450 after encountering firm resistance at the 100-day Simple Moving Average (SMA) around 1.0540.
2025.02.22 01:11GBP/USD slips after hitting record high past 100-day SMA
The GBP/USD registers losses during the North American session after testing the 100-day Simple Moving Average (SMA) at 1.2658.
2025.02.22 00:21AUD/USD faces pressure around 0.6400 ahead of flash US PMI
The AUD/USD pair faces selling pressure around 0.6400 in North American trading hours on Friday.
2025.02.21 23:19Disclaimer:
All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.
The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.
Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy
