USD/CAD sticks to modest gains around mid-1.3400s, eyes US CPI for fresh impetus – by hareshmenghani USDCAD Recession Fed Inflation Currencies
ession. The pair is currently placed near the daily top, around mid-1.3300s and for now, seems to have snapped a two-day losing streak to over a one-week low touched on Monday.undermines the commodity-linked Loonie, which, in turn, is seen acting as a tailwind for the USD/CAD pair. The Biden Administration announced on Monday that it will sell 26 million barrels of crude from the Strategic Petroleum Reserve as part of a release mandated by Congress.
will stick to its hawkish stance for longer should limit the downside for the US bond yields. Adding to this, recession fears should limit losses for the safe-haven buck.CPI print for January. The speculations were reaffirmed by the Labor Department's annual revisions of CPI data released on Friday, which showed that monthly consumer prices rose in December instead of falling as previously estimated. Moreover, the University of Michigan survey's one-year inflation expectations climbed to 4.2% for the current month from 3.9% in January.
Hence, the market focus will remain glued to the latest US consumer inflation figures, due for release later during the early North American session. The crucial US CPI report will play a key role in influencing the Fed's rate-hike path, which, in turn, should drive the USD demand. This, along with oil price dynamics, should provide some impetus to the USD/CAD pair and allow traders to grab short-term opportunities.
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