{"id":31030,"date":"2026-03-18T20:00:14","date_gmt":"2026-03-18T20:00:14","guid":{"rendered":"https:\/\/www.vtmarketsglobal.com\/en\/uncategorized\/31030\/"},"modified":"2026-03-18T20:00:14","modified_gmt":"2026-03-18T20:00:14","slug":"usd-cad-edges-lower-near-1-3700-as-boc-keeps-rates-steady-fed-decision-keeps-attention-focused","status":"publish","type":"post","link":"https:\/\/www.vtmarketsglobal.com\/en\/live-updates\/31030\/","title":{"rendered":"USD\/CAD edges lower near 1.3700 as BoC keeps rates steady; Fed decision keeps attention focused"},"content":{"rendered":"USD\/CAD gave back part of its earlier rise on Wednesday after the Bank of Canada (BoC) policy decision supported the Canadian Dollar. The move was limited as the US Dollar stayed firm ahead of the Federal Reserve rate decision due at 18:00 GMT.\n\nThe pair traded near 1.3701 at the time of writing. The US Dollar Index (DXY) was near 99.85 after rebounding from two days of declines.\n\n

Bank Of Canada Signals<\/h3>\nThe BoC kept its benchmark rate unchanged at 2.25%, the same level in place since October. Governor Tiff Macklem said rates could rise if energy costs lead to persistent inflation, or fall if energy prices drop and the economy weakens.\n\nMacklem referred to uncertainty linked to US trade policy and geopolitical risks, and said the US-Israel war with Iran is pushing oil prices higher and could lift inflation in the near term. He said it is too early to judge the war\u2019s effect on Canada\u2019s growth, and noted higher oil prices could raise energy export income while also raising costs for consumers.\n\nAttention turns to the Fed, with rates expected to stay at 3.50%\u20133.75% for a second straight meeting. Markets are watching the SEP, dot plot, and Jerome Powell\u2019s press conference.\n\nLooking back at the situation in 2025, the key difference today is that central bank paths are starting to converge. The wide interest rate gap between the Federal Reserve and the Bank of Canada (BoC), which defined much of last year, is narrowing. We must now position for a new environment where the BoC may be forced to act before the Fed.\n\nThe BoC’s tough talk on inflation from 2025 has softened considerably due to recent data. Canada’s February 2026 inflation report showed CPI cooling to 2.9%, below the 3.1% that was widely expected and marking a significant drop from last year’s highs. This gives the BoC cover to consider rate cuts sooner rather than later to support a sluggish economy.\n\n

Geopolitics And Policy Divergence<\/h3>\nThe geopolitical risks from the US-Israel war with Iran, which once threatened to keep oil prices and inflation persistently high, have also stabilized for now. With WTI crude oil holding a range around $81 a barrel, the threat of a major energy price shock has subsided from the critical levels we saw in 2025. This removes a major hawkish argument for the BoC, allowing them to focus more on domestic growth.\n\nConversely, the Federal Reserve now faces a more stubborn inflation picture than was anticipated late last year. The most recent US CPI data showed inflation holding firm at 3.2%, pushing back market expectations for the timing of the first rate cut. This pause from the Fed, while the BoC grows more dovish, creates a clear divergence that we can trade.\n\nGiven this setup, we should consider strategies that benefit from a stronger US dollar relative to the Canadian dollar in the coming weeks. Buying USD\/CAD call options with expiries in the next three to six months offers a defined-risk way to profit from this policy divergence. This position will gain value if the Fed is forced to hold rates steady while the BoC signals a clear intention to cut.\n\nCreate your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b>\n

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Start trading now – Click here<\/a> to create your real VT Markets account <\/strong> <\/p>\r\n","protected":false},"excerpt":{"rendered":"

USD\/CAD pared gains after BoC held rates, boosting loonie; upside capped as firm dollar awaited Fed decision.<\/p>\n","protected":false},"author":38,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[46],"tags":[],"class_list":["post-31030","post","type-post","status-publish","format-standard","hentry","category-live-updates"],"acf":[],"aioseo_notices":[],"featured_image_src":null,"featured_image_src_square":null,"author_info":{"display_name":"josephine","author_link":"https:\/\/www.vtmarketsglobal.com\/en\/author\/josephine\/"},"_links":{"self":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts\/31030","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/users\/38"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/comments?post=31030"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts\/31030\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/media?parent=31030"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/categories?post=31030"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/tags?post=31030"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}