USD/CAD erases post-FOMC decline as investors digest Powell’s remarks

Bears are busy reading between the lines and digesting Jerome Powell’s speech. They are cautiously concluding that the US disinflationary process has started.

The USD/CAD pair is under pressure and recording fresh multi-day lows retreating to 1.3274 before the latest reading at 1.3290 at the time of writing.

The Fed’s rhetoric has turned relatively dovish, despite inflation, ”running very hot”, this has led the market move out of the US dollar and pushed investors towards riskier asset classes, such as commodities and stocks, eventually supporting the Canadian counterpart.

The central bank raised interest rates for the eighth time but slowed its pace to 25 basis points to signal easing inflation. Still, the US dollar’s selloff gathered pace as the cracks in Jerome Powell’s comments started to reveal a dovish shift among Fed policymakers.