USD/CAD trades around 1.4010 on Wednesday at the time of writing, gaining 0.10% on the day. The pair maintains a bullish tone as the Canadian Dollar (CAD) remains under pressure from falling Oil prices, while traders position ahead of the Federal Reserve’s (Fed) monetary policy decision.

ABN AMRO economists discuss how a new chapter for the Federal Reserve could influence the US Dollar over coming months.

Canada New Housing Price Index (YoY): -2.4% (May) vs previous -2.3%

Retail Sales in the United States increased to $763.7 billion in May, the US Census Bureau reported on Wednesday. This print followed the 0.5% expansion recorded in the previous month and came in above market expectation (+0.5%). On a yearly basis, Retail Sales were up 6.9% in this period.

United States Retail Sales (YoY) rose from previous 4.9% to 6.9% in May

United States Retail Sales Control Group rose from previous 0.5% to 0.7% in May

United States Retail Sales ex Autos (MoM) came in at 0.8%, above forecasts (0.5%) in May

Canada New Housing Price Index (MoM) came in at -0.3% below forecasts (-0.1%) in May

United States Retail Sales (MoM) above forecasts (0.5%) in May: Actual (0.9%)

The United States (US) Federal Reserve (Fed) announces its interest rate decision on Wednesday, another pivotal meeting for markets to gauge the stance of policymakers and new Chair Kevin Warsh as energy prices retreat after the United States and Iran reached a framework deal to reopen the Strait of

The Euro (EUR) posts moderate losses against the US Dollar (USD) on Wednesday, giving away some of the ground gained over the last few days, with markets showing a cautious mood ahead of the US Federal Reserve’s (Fed) decision.

Societe Generale’s Kit Juckes notes that recent G10 policy moves, including a BOJ hike, have not produced dramatic FX shifts. He argues that a dovish Fed outcome would favour short USD/JPY positions.

Societe Generale’s Sam Cartwright notes that UK Headline CPI stayed at 2.8% year-on-year in May, undershooting both Bloomberg consensus and the BoE’s April MPR projection, while core inflation edged up to 2.6%.

OCBC’s Sim Moh Siong notes FX markets are in a holding pattern as traders await the FOMC, with Oil’s decline easing inflation pressures but seen as having limited further downside.

South Africa Retail Sales (YoY) declined to 1.3% in April from previous 2.6%

United States MBA Mortgage Applications down to -3.8% in June 12 from previous 10.8%

Kit Juckes at Societe Generale highlights that recent G10 central bank actions have not sparked major FX moves, with EUR/USD still range-bound. He notes deeper Eurozone GDP forecast cuts versus other regions.

Gold (XAU/USD) trades around $4,332.60 on Wednesday at the time of writing, little changed on the day, as investors remain cautious ahead of the Federal Reserve’s (Fed) monetary policy decision.

Societe Generale’s Kit Juckes relays Jan Groen’s view that the US economy shows resilient growth with sticky inflation, keeping the Fed on hold for now. He notes market pricing still leans toward a rate hike in early 2027.

The Japanese Yen (JPY) nurses mild gains against the US Dollar (USD) on Wednesday, as the USD/JPY pair eases to 160.20, still above 160.00, considered the limit of tolerable JPY weakness for Japanese authorities.

OCBC’s Christopher Wong notes the RBA kept rates at 4.35% while retaining a tightening bias, signalling readiness to hike if needed. However, slowing growth and rising unemployment point to a prolonged pause.

Societe Generale analysts Jitesh Kumar and Jeremy Sellem note that Brent Oil prices are normalizing following the US-Iran deal, but highlight differing adjustments across spot, volatility and option skew.

RaboResearch Global Economics & Markets discusses recent UK CPI and labour data and their implications for the Pound, EUR/GBP and GBP/USD. The bank notes softer UK inflation, signs of spare capacity in the labour market and tighter financial conditions.

UOB Global Economics & Markets Research notes that AUD/USD was little changed after the Reserve Bank of Australia paused at 4.35% following three consecutive 25 bps hikes.

OCBC’s Christopher Wong highlights that the BoJ’s widely expected 25 bp hike to 1.0% and confirmation of tapering ending in 2027 delivered limited support for the Japanese Yen.

UOB Global Economics & Markets Research highlights that Gold advanced as expectations for another Fed hike this year eased following an interim US-Iran peace deal that pushed Oil and inflation expectations lower.

ING strategists highlight that cyclical drivers have reasserted themselves in FX, underpinning a stronger Dollar over the coming months. They argue that these cyclical factors will keep the Dollar bid, delaying any meaningful downturn.

Germany 30-y Bond Auction declined to 3.49% from previous 3.62%

MUFG’s Derek Halpenny highlights that Fed Chair Kevin Warsh’s first post-FOMC press conference comes as Brent Oil has dropped sharply, easing near-term inflation risks but not eliminating them.

National Bank of Canada (NBC) analysts discuss the Canadian Dollar, noting that USD/CAD remains range-bound and sensitive to upcoming Canadian and US data releases. They highlight how recent moves have been driven by shifting expectations for Bank of Canada and Federal Reserve policy.