USD/CAD Slides Below 1.3630 Amidst Focus on Canadian Inflation – Fed Powell’s Interest Rate Cut Decision Looms
The USD/CAD pair is on a downward trend for the third consecutive trading session, with the Canadian Dollar strengthening below the key level of 1.3630. The US Dollar is facing pressure as market expectations lean towards the Federal Reserve implementing interest rate cuts in September.
Investor sentiment is currently favoring risky assets, as indicated by the positive performance of S&P 500 futures in the European session. The US Dollar Index (DXY) remains near a seven-month low, while US Treasury yields are stable around 3.87%. The upcoming Federal Open Market Committee (FOMC) minutes and Fed Chair Jerome Powell’s speech at the Jackson Hole Symposium will provide further insights into the Fed’s monetary policy direction.
Despite lower oil prices, the Canadian Dollar continues to outperform, driven by geopolitical factors affecting oil prices. The upcoming release of Canada’s Consumer Price Index (CPI) data for July on Wednesday will be a key event to watch. A slowdown in inflation could prompt speculations of further interest rate cuts by the Bank of Canada (BoC).
In summary, the USD/CAD pair is under pressure due to expectations of Fed interest rate cuts, while the Canadian Dollar remains resilient despite challenges in the oil market. The upcoming Canadian inflation data will be crucial in shaping the future direction of the currency pair and could impact investment decisions.