- USD/CAD is higher during the Asian session on Wednesday amid modest USD strength.
- Lower expectations for a 50 basis point Fed rate cut are pushing up US bond yields and supporting the dollar.
- A rebound in crude oil prices is supporting the CAD and limiting the pair’s gains.
The USD/CAD pair is attracting buying during the Asian session on Thursday and for now, it seems to have halted its pullback from a three-week high around the 1.3620-1.3625 area touched the previous day. The intraday rally, however, lacks bullish conviction, which warrants some caution before positioning for any significant upside move.
The crucial US Consumer Price Index (CPI) report indicated that consumer prices in the US are declining overall. That said, the core CPI indicated that underlying inflation remains persistent and dashed hopes of a larger rate cut of 50 basis points (bps) by the Federal Reserve (Fed) next week. This, in turn, leads to a spike in US Treasury bond yields, which pushes the US Dollar (USD) back close to the monthly peak and turns out to be a key factor acting as a tailwind for the USD/CAD pair.
Meanwhile, the US central bank is almost certain to start its monetary policy easing cycle and cut borrowing costs by 25 bps at the September 17-18 policy meeting. This, coupled with a generally positive tone around the equity markets, caps the safe-haven dollar. Moreover, a modest rebound in crude oil prices benefits the commodity-linked CAD and contributes to capping the USD/CAD pair, making it prudent to wait for strong follow-through buying before opening fresh bullish positions.
Market participants are now looking forward to the release of the US Producer Price Index (PPI) for some impetus later during the early North American session. This, along with US bond yields and overall risk sentiment, will boost demand for the USD. Apart from this, oil price dynamics should allow traders to take advantage of short-term opportunities around the USD/CAD pair.
US Dollar PRICE Today
The table below shows the exchange rate of the US Dollar (USD) against major currencies today. The US Dollar was the strongest currency against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.00% | 0.01% | 0.11% | -0.00% | -0.11% | -0.04% | 0.06% | |
| EUR | 0.00% | 0.02% | 0.13% | 0.02% | -0.10% | -0.03% | 0.06% | |
| GBP | -0.01% | -0.02% | 0.00% | -0.00% | -0.12% | -0.06% | 0.04% | |
| JPY | -0.11% | -0.13% | 0.00% | -0.13% | -0.25% | -0.20% | -0.08% | |
| CAD | 0.00% | -0.02% | 0.00% | 0.13% | -0.10% | -0.05% | 0.04% | |
| AUD | 0.11% | 0.10% | 0.12% | 0.25% | 0.10% | 0.07% | 0.15% | |
| NZD | 0.04% | 0.03% | 0.06% | 0.20% | 0.05% | -0.07% | 0.10% | |
| CHF | -0.06% | -0.06% | -0.04% | 0.08% | -0.04% | -0.15% | -0.10% |
The heatmap shows percentage changes of major currencies. The base currency is selected from the left column, while the quote currency is selected from the top row. For example, if you choose the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change shown in the chart will represent the USD (base)/JPY (quote).
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.
