- USD/CAD attracts buyers for the 10th day in a row and draws support from a combination of factors.
- Expectations of smaller rate cuts from the Fed help the USD maintain its recent strong gains to a two-month high.
- Weak oil prices weigh on the CAD and act as a tailwind for the pair ahead of the Canadian CPI.
The USD/CAD pair is trading near its highest level since August 6 during the Asian session on Tuesday, with the bulls making a fresh attempt to maintain momentum beyond the round 1.3800 mark.
The US dollar (USD) remains firm near a two-month high amid expectations of less aggressive easing by the Federal Reserve (Fed) and bets on a regular 25 basis point (bp) rate cut in November. This helps the benchmark 10-year US government bond yield remain stable above the 4% mark and continue to offer some support to the Dollar, which in turn is seen as a key factor driving the dollar. USD/CAD pair up for the tenth consecutive day.
Meanwhile, a report on Monday suggested that Israel will not attack Iran’s oil and nuclear facilities. Additionally, a drop in China’s oil imports for the fifth straight month raised concerns about weak demand in the world’s largest importer. Added to this is that OPEC reduced its global oil demand forecasts for 2024 and 2025. This leads to a further decline in crude oil prices, weighing on the commodity-linked CAD and lending additional support to the pair. USD/CAD.
The factors mentioned above largely overshadow Friday’s upbeat Canadian jobs data, which forced investors to scale back bets on a bigger rate cut by the Bank of Canada (BoC). Traders now await the release of Canada’s latest consumer inflation figures, which will be released later in the North American session. This, along with the Empire State Manufacturing Index and the Fed speeches, will influence the USD and provide some momentum to the USD/CAD pair.
economic indicator
Consumer Price Index (YoY)
Statistics Canada is the entity in charge of publishing the consumer price index, which is a measure of price movement through the comparison between the prices of retail sales of a basket of representative goods and services. The purchasing power of the Canadian dollar is reduced by inflation. He Bank of Canada targets an inflation range (1% – 3%). A high reading would anticipate an increase in interest rates and is bullish for the Canadian dollar.
Next post:
Tue Oct 15, 2024 12:30
Frequency:
Monthly
Dear:
1.8%
Previous:
2%
Fountain:
Statistics Canada
Why is it important for operators?
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.
