USD/CAD steadies after registering gains in the previous session, trading around 1.4110 during the Asian hours on Tuesday.
USD/CAD may lose ground amid rising Fed rate cut odds in December.Fed Governor Waller said his main concern is a weakening labour market, noting inflation is “not a big problem.”The commodity-linked CAD faces downward pressure amid declining Oil prices.
USD/CAD steadies after registering gains in the previous session, trading around 1.4110 during the Asian hours on Tuesday. The pair may depreciate as the US Dollar retreats as growing expectations of a Federal Reserve rate cut in December intensify, driven by recent dovish remarks from Fed policymakers.The CME FedWatch Tool suggests that markets are now pricing in an 81% chance that the Fed will cut its benchmark overnight borrowing rate by 25 basis points at its December meeting, up from 71% probability that markets priced a day ago.Fed Governor Christopher Waller told Fox Business on Monday that his primary concern is the weakening labour market, stating that inflation is “not a big problem” in light of recent softness in employment. Waller also suggested that the September payrolls figure is likely to be revised lower and cautioned that concentrated hiring is “not a good sign,” signalling his support for a near-term rate cut.Fed Waller’s remarks reinforced comments made on Friday by New York Fed President John Williams, which also contributed to shifting expectations toward earlier rate cuts. Williams indicated that interest rates could be lowered in the near term, ahead of key US retail sales and producer price data scheduled for release this week.The downside of the USD/CAD pair could be restrained as the commodity-linked Canadian Dollar receives downward pressure from the lower Oil prices. West Texas Intermediate Oil price trades around $58.70 at the time of writing. Crude Oil prices lose ground as the United States pushes for a peace plan between Ukraine and Russia to end the three-year war. The American Petroleum Institute weekly crude Oil stock report will be eyed later on Tuesday. Canadian Dollar FAQs What key factors drive the Canadian Dollar? The key factors driving the Canadian Dollar are the level of interest rates set by the Bank of Canada , the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets or seeking safe-havens – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar. How do the decisions of the Bank of Canada impact the Canadian Dollar? The Bank of Canada has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive. How does the price of Oil impact the Canadian Dollar? The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD. How does inflation data impact the value of the Canadian Dollar? While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar. How does economic data influence the value of the Canadian Dollar? Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Emerging markets FX vulnerable, shaken, but not toppled (yet)Financial markets repricing the near-term fed funds rate higher—particularly the Fed's December meeting—has shaken emerging market currencies.
Read more »
USD/CAD remains below 1.4100 amid renewed expectations of Fed rate cutsUSD/CAD remains subdued for the second successive session, trading around 1.4090 during the Asian hours on Monday. The pair depreciates as the US Dollar (USD) loses ground amid renewed expectations of a Fed rate cut in December.
Read more »
USD/CAD Price Forecast: Trades around 1.4100 due to bullish biasUSD/CAD recovers its recent losses from the previous session, trading around 1.4100 during the early European hours on Monday. The daily chart’s technical setup reflects a persistent bullish bias, with the pair remaining within its ascending channel pattern.
Read more »
Crude Oil price today: WTI price bullish at European openingWest Texas Intermediate (WTI) Oil price advances on Monday, early in the European session. WTI trades at $58.13 per barrel, up from Friday’s close at $57.90.Brent Oil Exchange Rate (Brent crude) is stable, hovering around its previous daily close at $61.90.
Read more »
USD/CAD flatlines around 1.4100 with the Greenback losing momentumThe US Dollar is trading flat, around the 1.4100 level against the Canadian Dollar, after failing to break above 1.4130 on Friday.
Read more »
USD/CAD holds near two-week highs as firm Dollar offsets rising Fed cut betsThe Canadian Dollar (CAD) trades on the back foot against the US Dollar (USD) on Monday, as the Greenback holds firm despite rising Federal Reserve (Fed) rate-cut expectations.
Read more »