Near 1.2500, the USD/CAD is trading in the negative region.
The Bank of Canada cut its weekly asset purchases by one billion dollars.
The focus moves to Governor Tiff Macklem of the Bank of Canada’s press conference.
With the first reaction to the Bank of Canada’s (BoC) monetary policy statements, the USD/CAD pair fell to a daily low of 1.2434, but quickly recovered. At the time of writing, the pair was trading at 1.2496, down 0.1 percent on the day.
After its July meeting, the Bank of Canada kept its policy rate at 0.25 percent and decreased the objective of weekly net asset purchases of government of Canada bonds to C$2 billion from C$3 billion, as expected. Despite this hawkish move, the BoC maintained a cautious tone in its policy statement, which harmed the CAD.
The policy statement stated, “Recent emergence of novel COVID-19 variants is a major worry, especially for locations where immunization rates remain low.” In addition, the bank decreased its prediction for 2021 GDP growth to 6% from 6.5 percent in April.
Governor Ticc Macklem of the Bank of Canada will hold a press conference at 1515 GMT to discuss the policy outlook.
The broad-based USD decline, on the other hand, is causing USD/CAD to remain in negative territory. Earlier in the afternoon, the US Federal Reserve released FOMC Chairman Jerome Powell’s written statements, which will be delivered at a two-day congressional hearing beginning at 1600 GMT on Wednesday.
Powell is expected to say that the job market is still far from where it needs to be in order to start tapering bond purchases. In addition, the chairman will state that monetary policy would continue to provide strong assistance until the economy has fully recovered. The US Dollar Index is currently trading at 92.43, down 0.36 percent on the day./n
