USD/CAD defends 1.3600 as US Dollar recovers ahead of US Inflation and Fed policy – by Sagar_Dua24 USDCAD BOC Fed Inflation SEO
has recovered sharply as the market mood has turned cautious again ahead of the United States inflation and the outcome of the Federal Reserve policy.
The US Dollar Index has recovered sharply after a corrective move below the round-level support of 105.00. The USD Index has accelerated its recovery to near 105.06 and is expected to remain volatile ahead.
This has led to a decline in the consensus for headline inflation to 7.4% vs. the former release of 7.7%. While the core CPI is expected to trim to 6.1% against 6.4% reported earlier. Analysts at JP Morgan Chase & Co. have cited that a soft reading in US CPI data could spark a powerful rally in US equities. The 500-stock basket of the United States could rally up to 10% if headline inflation drops to 6.9% or lower, as reported by Bloomberg.
The risk of higher interest rate peak guidance for CY2023 as the inflation rate will remain beyond the targeted rate of 2% for a while. Rabobank analysts said they expect the US central bank to hike the policy rate by 50 basis points and see policymakers revising the terminal rate projection to the neighborhood of 5%.
Meanwhile, the Relative Strength Index is oscillating in a 40.00-60.00 range, which indicates a consolidation ahead till the release of a potential trigger.
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