- USD/CAD rebounds from Monday’s five-month low of 1.3828.
- Fed’s Bostic noted that the US central bank still faces a long path to reach its 2% inflation goal.
- Canada’s 10-year government bond yield eased to 3.12% as investors reacted to evolving trade dynamics and ongoing global uncertainties.
USD/CAD halts its four-day losing streak, trading around 1.3890 during the Asian hours on Tuesday. The pair edges higher as the US Dollar (USD) attempts to stabilize amid mounting concerns over stagflation. Traders will likely observe BoC Consumer Price Index Core data for March due later in the day.
Atlanta Fed President Raphael Bostic remarked during early Tuesday’s market session that the US central bank still has a long road ahead to achieve its 2% inflation target, casting doubt on market expectations for additional interest rate cuts.
Deutsche Bank now forecasts a 25 basis point rate cut in December—reversing its previous stance of no cuts in 2025—followed by two more cuts in Q1 2026. The terminal rate is projected at 3.5–3.75%.
Meanwhile, the Canadian Dollar (CAD), a risk-sensitive currency, saw support as market sentiment improved following US President Donald Trump’s announcement of tariff exemptions on select tech products—such as smartphones, laptops, and other electronics. The move helped ease fears of a broader economic slowdown amid escalating US-China trade tensions.
Canada’s 10-year government bond yield slipped to 3.12% on Tuesday, retreating from a recent high of 3.27%, recorded on April 11, as investors adjusted to shifting trade dynamics and persistent global uncertainties in line with broader market trends.
