Will the Japan-Canada Central Bank Meeting Influence the USD/CAD Exchange Rate in the 1.39 Range?
02.09.2026
- U.S. August ADP Employment Report
- Bank of Canada Policy Rate
In the U.S. currency market the previous day, the Canadian dollar fell against the U.S. dollar amid expectations of a September rate hike by the Federal Reserve (Fed) and expectations that the Bank of Canada would keep its policy rate unchanged.While the market has priced in a roughly 66% probability that the Fed will raise rates by 25 basis points in September, the Bank of Canada is expected to keep its policy rate unchanged at 2.25%.The USD/CAD pair traded within a range of approximately 64 pips, between 1.3845 and 1.3909 Canadian dollars, and closed near 1.3898 Canadian dollars.The level around 1.3910 CAD is likely to act as resistance, while the level around 1.3845 CAD is expected to provide support. The focus will be on whether the pair can maintain the 1.3900 CAD level even after the policy rate announcement.
Despite accelerating inflation in the eurozone, the euro fell against the U.S. dollar. The eurozone’s August Harmonized Index of Consumer Prices (HICP, preliminary reading) came in at 3.3% year-over-year, in line with market expectations and above the previous reading of 2.9%.Meanwhile, the core index—excluding energy, food, alcohol, and tobacco—rose 2.4% year-over-year, falling short of market expectations and the previous reading of 2.5%. The euro traded against the U.S. dollar within a range of approximately 41 pips, between $1.1584 and $1.1625, and closed near $1.1591.The $1.1625 level is likely to act as resistance, while the $1.1580 level is likely to act as support. We will be watching to see if the pair can recover the key $1.1600 level.
In today’s economic news, the Reserve Bank of New Zealand raised its policy rate by 25 basis points from 2.50% to 2.75% at 11:00. Later today, at 21:15, the U.S. August ADP employment report is scheduled for release, with expectations of an increase to 48,000 from the previous reading of 44,000.At 10:45 p.m., the Bank of Canada will announce its policy rate, which is expected to remain unchanged at 2.25%. At 11:00 p.m., U.S. July manufacturing new orders will be released, and at 11:30 p.m., Bank of Canada Governor Tiff Macklem and Senior Deputy Governor Carolyn Rogers will hold a press conference.At 27:00, the U.S. Federal Reserve’s Beige Book will be released. We will be watching to see how the U.S. employment situation and the Bank of Canada’s policy stance influence the direction of North American currencies.
Author: Keisuke Sakurai
