USD/CAD treads water above 1.4000 due to cautious Fed policy outlook
The post USD/CAD treads water above 1. 4000 due to cautious Fed policy outlook appeared com. USD/CAD remains steady after two days of gains, trading around 1. 4010 during the Asian hours on Monday. The pair struggles as the Canadian Dollar (CAD) gains ground on higher Oil prices. It is important to note that Canada is the largest crude exporter to the United States (US). West Texas Intermediate (WTI) Oil price holds gain around $61. 00 per barrel at the time of writing. Crude Oil prices appreciate as the Organization of the Petroleum Exporting Countries and its allies (OPEC+) signaled a pause in output increase. OPEC+ on Sunday said it planned to pause output increases in the first quarter (Q1) of 2026, following another modest hike for next month. However, the USD/CAD pair may regain its ground and continues its winning streak for the third consecutive session as the US Dollar (USD) receives support from dampening expectations for a December rate cut by the US Federal Reserve (Fed), following the central bank’s decision of lowering its benchmark overnight borrowing rate for the second time this year to a range of 3. 75%-4. 0%. Fed Chair Jerome Powell said during the post-meeting press conference that another rate cut in December is far from certain. Powell also cautioned that policymakers may need to take a wait-and-see approach until official data reporting resumes. Fed funds futures traders are now pricing in a 69% chance of a cut in December, down from 93% a week ago, according to the CME FedWatch Tool. However, traders may adopt caution due to the prolonged government shutdown, which could fuel economic concerns in the United States (US). The US government impasse has now entered its sixth week with no easy endgame in sight amid a deadlock in Congress on the Republican-backed funding bill. Canadian Dollar FAQs The key factors driving the Canadian Dollar (CAD) are the level of.