• USD/CAD trades back and forth near 1.3800 ahead of BoC interest rate meeting.
• The BoC is expected to reduce interest rates further by 25 bps.
• The uncertainty over US presidential elections has dampened market sentiment.

The USD/CAD pair trades in a tight range near the round-level figure of 1.3800. The Loonie asset consolidates as investors shifts to the sidelines with focus on the Bank of Canada’s (BoC) monetary policy meeting scheduled for 13:45 GMT.

The BoC is expected to deliver subsequent rate cuts due to cooling inflationary pressures. BoC’s core Consumer Price Index (CPI) accelerated to 1.9% in June but remains below the bank’s target of 2%. Also, Canada’s labor market conditions have deteriorated due to higher interest rates. The central bank is expected to reduce interest rates again by 25 basis points (bps) to 4.5%. Earlier, the BoC pivoted to policy normalization in the June meeting