The US dollar is lower against the Canadian dollar on Wednesday following an emergency half-a-percent rate cut from the US Federal Reserve ahead of a decision from the Bank of Canada on Canadian interest rates later today.

USD/CAD was down by 30 pips (-0.22%) to 1.3356 with a daily range of 1.3342 to 1.3388 as of 9.30am GMT.

USD/CAD rallied +0.4% on Tuesday but fell short at Monday’s peak around 1.338. Weekly returns for the exchange rate stand at -0.35%.

The Canadian dollar

Two meetings are driving the action in the Canadian dollar today – the Bank of Canada meeting later and the 2-day OPEC meeting which started today and finishes tomorrow.

Following the G7 teleconference call that pledged unspecified coordinated action and the shock decision by the US Federal Reserve to carry out an emergency rate cut, it now seems very likely the Bank of Canada will lower interest rates today. The Canadian central bank had opened the door to a rate cut at its last meeting. The uncertainties created by the coronavirus for the Canadian economy would suggest it will decide now is the right time to lower rates by 25 basis points.

In a similar vein to the market reaction to the cut in Australian interest rates yesterday, the Canadian dollar is moving higher before the decision at 15:00 GMT. Markets have long been pricing in this rate cut with a substantial drop in the Loonie this year. The tone of the statement and from Governor Poloz about the prospect for additional moves will be what drives any future direction in the Loonie.

The US dollar

The surprising decision at 10am New York time yesterday by the FOMC to lower the US Fed funds rate by 50 basis points saw a mixed reaction in markets. Markets had been predicting the Fed would lower interest rates after Jerome Powell’s unusual press release last week that the central bank would take the necessary steps to combat the coronavirus. But not many were expecting its so soon and so the dollar dropped but a sense of panic about the decision also saw shares on Wall Street turn lower too. is a news site only and not a currency trading platform. is a site operated by TransferWise Inc. (“We”, “Us”), a Delaware Corporation. We do not guarantee that the website will operate in an uninterrupted or error-free manner or is free of viruses or other harmful components. The content on our site is provided for general information only and is not intended as an exhaustive treatment of its subject. We expressly disclaim any contractual or fiduciary relationship with you on the basis of the content of our site, any you may not rely thereon for any purpose. You should consult with qualified professionals or specialists before taking, or refraining from, any action on the basis of the content on our site. Although we make reasonable efforts to update the information on our site, we make no representations, warranties or guarantees, whether express or implied, that the content on our site is accurate, complete or up to date, and DISCLAIM ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Some of the content posted on this site has been commissioned by Us, but is the work of independent contractors. These contractors are not employees, workers, agents or partners of TransferWise and they do not hold themselves out as one. The information and content posted by these independent contractors have not been verified or approved by Us. The views expressed by these independent contractors on do not represent our views.