• USD/CAD weakens near 1.3585 in Wednesday’s early Asian session. 
• Firmer expectations of a Fed rate cut in September after the FOMC Minutes have exerted some selling pressure on the USD. 
• The recent Canadian CPI supported the case for another rate cut by the BoC.

The USD/CAD pair edges lower to 1.3585 during the early Asian session on Thursday. The Greenback remains under selling pressure as the Minutes of the US Federal Reserve (Fed) opened the door for an interest rate cut at its September meeting,

According to the minutes of the Fed’s July meeting, “the vast majority” of participants observed that, if the data continued to come in about as expected, it would likely be appropriate to cut the interest rate at the next meeting. 

Markets are now fully pricing in a September cut, which would be the first reduction since the emergency easing in the early days of the Covid crisis. A full percentage point worth of rate cuts is expected by the end of this year. The growing expectation of a Fed rate cut continues to undermine the US Dollar and US Treasury bond yields.