- USD/CAD aims to stabilize above 1.3500 amid USD strength.
- Durable goods orders in the US rose a surprising 0.2%, while investors were anticipating a 0.5% decline.
- Optimism about the US economic outlook appears uncertain as Fed policymakers support higher interest rates.
The pair USD/CAD is facing some selling pressure as it attempts to extend higher above the immediate resistance at 1.3540 early in the New York session. The Canadian Dollar struggles to extend the recovery while the US Dollar faces a nominal sell-off after posting a new 10-month high at 106.45.
The S&P 500 opens on a positive note, as investors move away from the risks associated with a possible government shutdown. Market sentiment remains cautious as the Federal Reserve (Fed) is expected to keep interest rates higher for longer. The dollar could resume its bullish path as August US durable goods orders exceeded expectations.
Surprisingly, durable goods orders rose 0.2%, while investors were expecting a 0.5% decline. In the month of July, economic data recorded a significant contraction of 5.6%. The expansion of the order book for basic goods indicates some optimism among companies despite the increase in interest rates by the Federal Reserve (Fed).
Optimism about the US economic outlook appears uncertain as Fed officials consistently support an interest rate hike by the central bank. Minneapolis Fed President Neel Kashkari said there was a risk that interest rates would have to rise, but added that it was difficult to know. Earlier, Fed Governor Kashkari commented that the economy is fundamentally much stronger than anticipated. Therefore, raising rates further seems justified and they need to stay high to cool things down.
Regarding oil, the oil price marks a new 10-month high at $92.66 as investors see demand increasing due to higher consumption prospects. Meanwhile, investors await weekly oil inventory data from the US Energy Information Administration (EIA), due at 14:30 GMT. It should be noted that Canada is the main exporter of oil to the United States and the rise in oil prices provides support to the Canadian dollar.
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.
