Ella 
During early Asian trading on Tuesday, USD/CAD remained below the 1.3600 mark. The Bank of Canada (BOC) will announce its interest rate decision on Wednesday, and no change in interest rates is expected. Meanwhile, falling oil prices weighed on the London dollar, providing some support for USD/CAD. At press time, the currency pair was trading at 1.3575, unchanged throughout the day.
The Federal Reserve (Fed) is expected to keep its benchmark interest rate in a range of 5.25% to 5.5% at its March meeting. Financial markets have priced the first rate cut in June, but that could change if inflation stalls or wages continue to exceed expectations. Federal Reserve official Raphael Bostic said on Monday that there is no urgent pressure for the central bank to cut interest rates given the booming economy and job market.
On the other hand, the Bank of Canada is widely expected to keep its key interest rate at 5.0% on Wednesday. Investors put an 80% chance of the first rate cut coming around June. The press conference may provide some hints on the timing of a rate cut. Dovish comments from the Governor of the Bank of Canada may put some selling pressure on the Canadian Dollar (CAD).
Market participants will focus on the U.S. ISM Services Purchasing Managers Index, which is expected to slow to 53.0 in February from 53.4 in January. Later this week, Federal Reserve Chairman Jerome Powell will give testimony before the Senate, which will be a closely watched event before the release of U.S. non-farm payrolls (NFP) data on Friday.
