USD/CAD Holds Near 1.3700 as Firm US Dollar Supports Pair
USD/CAD held near 1.3700 on Thursday as the US Dollar stayed firm after January FOMC minutes. Fed officials signaled no rush to cut rates, while the BoC is expected to keep rates at 2.25% through 2026.
USD/CAD clings to Wednesday’s gains near 1.3700 during the European trading session on Thursday as the US Dollar trades broadly firm following the release of the Federal Open Market Committee minutes of the January policy meeting on Wednesday. During the press time, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, clings to gains near Wednesday’s high around 97.80.
Federal Reserve January meeting minutes showed that officials are not in a rush to lower interest rates soon unless they see meaningful progress in price pressures returning towards the central bank’s 2% target. Meanwhile, the Canadian Dollar trades broadly weak even as the Bank of Canada is expected to hold interest rates at their current levels of 2.25% through 2026. The BoC is unlikely to make any monetary policy adjustment this year as inflationary pressures have remained close to the central bank’s 2% target.
USD/CAD exhibits strength at around 1.3700 as of writing. The 20-day Exponential Moving Average has eased from its prior decline and is beginning to flatten, signaling fading downside pressure, and a daily close above the average would keep the recovery bias intact. The 14-day Relative Strength Index at 52 confirms stabilizing momentum.
Price holds marginally above the 20-EMA, placing initial support at 1.3662. The psychological level of 1.3500 will remain a key support area, while a sustained hold above the average could open room for an extension towards the February 6 high at 1.3740. The price could advance further towards the round-level figure of 1.3800 if it breaks and holds above 1.3740.