- The loonie weakens after Canadian inflation data.
- USD/CAD rises accelerate in the face of an advance in the dollar.
- USD/CAD a few pips from this year’s highs.
The USD/CAD rose from the 1.3285 zone and reached 1.3343, outperforming Monday’s high by one pip and thus reaching levels not seen since November 2020. It is trading at 1.3330/35, with a bullish tone. The pair gained momentum after the Canadian inflation data and more recently as the dollar strengthened across the market.
The loonies was affected after learning that the Canadian Consumer Price Index fell 0.3% in August, and the market consensus was for a decrease of 0.1%. With respect to twelve months after the rise, it was 7%, less than the 7.3% expected.
Following the figures the loonie began to back down on all fronts. The weakness then became more pronounced as stocks fell on Wall Street and oil prices fell.
At the same time, the dollar strengthened in the market, with the 10-year Treasury yield advancing to 3.57%, a new high in years. DXY reached as high as 110.25, the highest level since September 7th. This occurs in the context of the start of the two-day FOMC meeting. The Federal Reserve is expected to raise the benchmark interest rate by 75 basis points on Wednesday.
Technical levels
Source: Fx Street
With 6 years of experience, I bring to the table captivating and informative writing in the world news category. My expertise covers a range of industries, including tourism, technology, forex and stocks. From brief social media posts to in-depth articles, I am dedicated to creating compelling content for various platforms.
