• USD/CAD trades in a tight range near 1.3550 as investors have sidelined ahead of the BoC’s monetary policy announcement.
• The BoC is expected to cut interest rates by 25 bps for the third straight time.
• The US Dollar delivers a modest correction with US NFP under spotlight.

The USD/CAD pair trades sideways near 1.3550 in Wednesday’s European trading hours. The Loonie asset struggles for direction as investors await the Bank of Canada’s (BoC) interest rate decision, which will be announced at 13:45 GMT.

Investors see the BoC cutting its key borrowing rates by 25 basis points (bps) to 4.25%. This will be the third straight interest rate cut decision by the BoC, which it started in June after gaining confidence that price pressures will return to bank’s target of 2%. Also, the Canadian economy was struggling to bear the consequences of BoC’s restrictive interest rate stance, which forced them to start unwinding high rates.

Though the BoC is widely anticipated to cut interest rates, investors will majorly focus on the interest rate guidance and the economic outlook. Signs of deeper policy-easing this year from the monetary policy statement or BoC Governor’s Tiff Macklem press conference or both would weigh heavily on the Canadian Dollar (CAD).