USD/CAD tumbles to 1-week lows after Fed hints at a rate cut

• US Dollar drops and holds at daily lows after FOMC meeting. 
• Fed’s Powell: Case for additional accommodation has strengthened. 

The USD/CAD pair dropped from 1.3350 to 1.3283 on the back of a sharp decline of the US Dollar across the board following the FOMC meeting. 

The pair continues to trade near the lows, under 1.3300 as the greenback holds to losses. The Federal Reserve kept rates unchanged as expected and mentioned uncertainties had increased. The tone signals that it moved closer toward easing its policy. The word “patient” was removed from the statement helping speculations about a potential rate cut as soon as the July meeting. 

During his press conference, Powell mentioned that the case for additional accommodations has strengthened in line with the FOMC statement. He added the US Central bank will act promptly if needed to sustain economic expansion. 

The USD/CAD, that was already down for the day after Canadian inflation data, dropped further with the decline of the greenback on the dovish Fed. The pair is having the worst daily performance in months as it holds at 1-week lows, back under 1.3300 and looking at 1.3275, the next relevant support before the June low around 1.3240. 

Technical Levels