- USD/CAD aims to move above 1.3800 as oil price continues to correct and BoC keeps policy unchanged.
- Dollar falls modestly following upbeat US GDP data for the third quarter.
- Oil prices widen losses despite worsening tensions in the Middle East.
The pair USD/CAD look for stability above the resistance of the round level of 1.3800 in the American session. The pair continues to rise amid multiple tailwinds from falling oil prices, unchanged monetary policy by the Bank of Canada (BoC), and broader strength in the US Dollar.
The S&P 500 opens lower in a context of intensifying tensions in the Middle East. The Dollar Index (DXY) recorded a small correction from 106.88 following the release of upbeat third quarter Gross Domestic Product (GDP) data. The US economy grew 4.9% in the July-September quarter, compared to expectations of 4.1% annualized. In the April-June quarter, the US economy recorded a growth rate of 2.1%.
An optimistic US GDP could raise bets for a further interest rate hike by the Federal Reserve (Fed) in the remainder of 2023. Aside from the US GDP data, the rise in Durable goods orders have also raised hopes that the Fed will raise interest rates. New orders for durable goods grew at a stronger rate of 4.7% in September, versus expectations for a 1.5% increase.
Meanwhile, the Canadian dollar is facing an intense sell-off as the Bank of Canada (BoC) kept interest rates unchanged at 5% on Wednesday. BOC Governor Tiff Macklem kept the door open to further tightening of monetary policy, arguing that overall inflationary pressures have increased and that consumer inflation could remain above the desired 2% target for another two years.
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.
