Photo by Michelle Spollen on Unsplash

The Canadian Dollar (CAD) shed further weight against the US Dollar (USD) on Wednesday, with Loonie flows further hobbled by a broad-market step back into the safe haven Greenback. The Federal Reserve (Fed) kept interest rates on hold, as most investors had expected, but Fed Chair Jerome Powell struck a notably cautious tone, knocking back hopes for a rate cut in September.

Ongoing weakness in the Canadian Dollar has pushed the USD/CAD pair back into the top of the charts, bolstering the pair back above 1.3800 for the first time since May. The pair has broken through near-term technical levels around 1.3750, and the next challenge for Greenback bulls (or Loonie sellers) will be to muscle USD/CAD back over the 200-day Exponential Moving Average (EMA) near 1.3900.

The Bank of Canada (BoC) also held interest rates steady earlier Wednesday, taking further wind out of CAD traders’ sails. Citing ongoing inflation risks from non-energy goods and ongoing global trade tensions, the BoC has been pushed back into a ongoing wait-and-see approach as the Canadian government waits to see what will transpire following US President Donald Trump’s vows to reinstitute sweeping tariffs after August 1.

Daily digest market movers: Central banks dominate the financial landscape on Wednesday

• The Canadian Dollar accelerated into further losses against the Greenback, falling over one-half of one percent on the day and chalking in a fourth straight losing session against the US Dollar.
• The Fed kept interest rates on hold on Wednesday, as markets broadly expected.
• The odds of a Fed rate cut in October were decimated following cautious statements from Fed Chair Jerome Powell, and rate markets are now hopeful for a quarter-point interest rate cut in October.
• The BoC remains in a similar wait-and-see stance as multiple countries await to see how tariff impacts will unfold in headline economic data in the months to come.
• BoC's Macklem: US trade policy remains unpredictable

USD/CAD daily chart

(Click on image to enlarge)

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