Analyst: The Canadian dollar faces downward risks in the short term.

Analysts at Monex Europe said in a report that the Canadian dollar faces the risk of depreciation after the Fed's policy decision on Wednesday and the release of Canadian employment data on Friday. The Fed may dampen market expectations of a rate cut, as inflation remains high and the labor market remains strong. They said that weak Canadian employment data could further accelerate selling pressure on the Canadian dollar. In contrast to last week's US employment data, Canadian economic data may show some weakness related to tariffs, which could strengthen expectations of a rate cut by the Bank of Canada in June.