USD/CAD snaps the four-day losing streak above the 1.3400 mark, eyes on Canadian GDP, Fed rate decision

• USD/CAD recovers some lost ground near 1.3405 on the stronger USD. 
• The Federal Reserve will hold its first rate meeting in 2024 in the range of 5.25–5.50%.
• The Bank of Canada (BoC) said growth in Canada is likely to remain around zero in the first quarter of 2024.
• Investors await the Canadian GDP growth and FOMC rate decision on Wednesday.

The USD/CAD pair snaps the four-day losing streak during the early Asian session on Wednesday. The recovery of the pair is supported by upbeat US job openings and consumer confidence data, which lift the US dollar (USD). The Federal Reserve (Fed) monetary policy meeting on Wednesday will be in the spotlight, with no change in rate expected. At press time, USD/CAD is trading at 1.3405, gaining 0.04% on the day. 

The number of available jobs in the US unexpectedly rose in December to 9.026 million, according to Bureau of Labor Statistics data released Tuesday. It’s the first time openings have popped above 9 million since September. Additionally, the Conference Board Consumer Confidence came in at 114.8 in January versus 108.0 prior, the highest in two years.

The Federal Reserve (Fed) will announce its interest rate decision on Wednesday. Investors believe the Fed will keep the federal funds rate steady in a range of 5.25% to 5.5%. After the Fed meeting, the press conference by Fed Chairman Jerome Powell will be closely watched. Traders will focus on his word for any hints of a rate cut timeline.

Statistics Canada will release the Gross Domestic Product (GDP) for November, which is forecast to expand by 0.1% MoM. The Bank of Canada (BoC) said this week that economic growth in Canada has stalled since mid-2023 and is likely to remain around zero in the first quarter of 2024. Stubborn core inflation readings prompted the BoC to keep its interest rate at a 22-year high last week. Meanwhile, the higher oil price due to the ongoing geopolitical tensions in the Middle East might cap the downside of the commodity-linked Loonie. 

Moving on, the Canadian GDP growth number is due on Wednesday, ahead of the Fed monetary policy meeting and press conference. On Friday, the US Nonfarm Payrolls will be closely watched by market players. These events could give a clear direction to the USD/CAD pair.