The USD/CAD currency pair extended gains on Monday, pulling further away from a 16-month low of 1.3481, as investors continued to weigh what a Federal Reserve under the leadership of Kevin Warsh might be.
Market players assumed Warsh was less likely to press for all-out swift interest rate cuts than other candidates who had been in the running.
According to Richard Clarida, PIMCO’s global economic adviser and a former Fed vice chair, Warsh will be able to deliver two rate cuts in 2026 and probably a third one.
The Fed left its federal funds rate target range intact at 3.50%-3.75% at its January 27th-28th meeting, in line with market consensus, following three successive rate cuts last year that brought borrowing costs to their lowest level since 2022.
Looking ahead, the US Dollar may trade cautiously as investors await January’s Nonfarm Payrolls data on Friday. The labor market report will guide expectations for US interest rates.
According to the CME FedWatch tool, the market currently expects the Fed to keep rates unchanged at its March meeting.
Attention also turns to the US ISM Manufacturing PMI for January due out at 15:00 GMT and Canada’s Manufacturing PMI due out at 14:30 GMT.
The USD/CAD currency pair was last up 0.13% on the day to trade at 1.3633.






