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The USD/CAD pair remains flat near 1.3690 as traders await key policy decisions from the Federal Reserve (Fed) and the Bank of Canada (BoC). The pair has shown minimal movement following a mixed previous session, with market participants adopting a cautious stance ahead of the central banks' rate announcements later in the day. The Fed's decision on U.S. interest rates and the BoC's assessment of Canadian economic conditions will likely dictate the pair's near-term direction. The outcome of these policy meetings is critical for forex markets, as divergent monetary policy paths between the U.S. and Canada could drive USD/CAD volatility. A hawkish Fed or dovish BoC would strengthen the USD, pushing USD/CAD higher, while the opposite scenario would weaken the USD. Traders are closely monitoring inflation data, employment reports, and central bank rhetoric for clues about policy trajectories. For Gulf investors, the USD/CAD movement is relevant due to its impact on energy exports and cross-border trade. A stronger USD could affect oil prices and commodity-linked assets. Key levels to watch include 1.3650 (support) and 1.3750 (resistance). The final policy statements from both banks, scheduled for later today, will provide clearer guidance for positioning.
