- USD/CAD falls further to 1.3670 ahead of BoC Governor Tiff Macklem’s speech.
- Canada’s annual headline CPI is estimated to have declined to 2.6%.
- Fed officials want to see inflation decline for months before moving to rate cuts.
The USD/CAD pair extends its losing streak for the seventh trading session on Monday. The USD/CAD pair weakens as the DXY Dollar Index corrects near 105.66 after failing to extend above the crucial resistance of 106.00. The US dollar (USD) falls as investors move into perceived risky assets amid expectations that the Federal Reserve (Fed) will make two rate cuts this year.
S&P 500 futures have posted decent gains in the European session, showing increased risk appetite among investors. US 10-year Treasury yields fall to 4.25%.
Contrary to market expectations, Fed officials indicated in the latest interest rate projections that there will only be one rate cut this year. The Fed continues to reiterate the same even though the Consumer Price Index (CPI) report for May showed that price pressure eased more than expected.
Richmond Fed Bank President Thomas Barkin said Friday he wants more conviction before proceeding with rate cuts. Fed officials would gain more conviction after seeing inflation decline for months.
Meanwhile, the Canadian dollar strengthens even as investors expect the Bank of Canada (BoC) to make subsequent rate cuts. For more clarity on the interest rate outlook, investors will be watching BoC Governor Tiff Macklem’s speech scheduled for 17:00 GMT.
This week, investors will also focus on Canada’s CPI report for May, due out on Tuesday. The annual headline CPI is expected to have slowed to 2.6% from 2.7% in April.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
