USD/CAD stays above 1.4350 due to lower Oil prices, hawkish policy shift by Fed

FOMC Minutes Reveal Fed’s Inflation Concerns and Adjusted Rate Expectations

The Federal Open Market Committee (FOMC) Minutes from the December policy meeting highlight concerns among Federal Reserve (Fed) officials regarding inflation and the potential impact of President-elect Donald Trump’s upcoming policies. In light of heightened uncertainty, policymakers signaled a slower pace for rate reductions, revising their projected rate cuts for 2025 down to two from four, compared to estimates from the September meeting.

US Dollar Holds Strong Amid Rising Bond Yields

The US Dollar Index (DXY), which tracks the USD’s performance against a basket of six major currencies, remains steady near 109.00. This stability is supported by rising long-term US bond yields, fueled by heavy supply. At the time of writing, the 10-year yield stands at 4.66%, while the 30-year nears 4.90%.

Canadian Politics in Turmoil as Trudeau Resigns

Canadian Prime Minister Justin Trudeau announced his resignation after nine years in office, citing plans to step down as the Liberal Party leader once a successor is chosen. This decision comes amidst increasing political instability, tariff tensions, and declining approval ratings, potentially setting the stage for snap elections. Trudeau’s departure raises questions about Canada’s political and economic direction in the months ahead.

This comprehensive update ensures you stay informed about key developments in monetary policy, currency markets, and international politics.