The USD/CAD pair reverses a modest Asian session dip and currently trades around the 1.3575 region, nearly unchanged for the day, though any meaningful appreciating move still seems elusive.
USD/CAD struggles to attract any meaningful buyers amid broad-based USD weakness. Bets for a larger Fed rate cut, along with a positive risk tone, weigh heavily on the buck. This week’s stronger recovery in Oil prices underpins the Loonie and acts as a headwind. The US Dollar sinks to over a one-week low amid growing expectations for an oversized interest rate cut by the Fed eral Reserve next week, bolstered by signs of easing inflationary pressures in the US.
Market participants now look forward to Friday's economic docket – featuring the release of the Preliminary Michigan US Consumer Sentiment Index and second-tier data from Canada. Apart from this, the US bond yields and the broader risk sentiment might influence the USD demand, which, along with Oil price dynamics, could allow traders to grab short-term opportunities around the USD/CAD pair.
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