USD/CAD Broke Its Three-Day Losing Streak And Stood Above 1.3700

USD/CAD broke a three-day losing streak in early Asian trading on Thursday, trading around 1.3730. The renewed demand for the U.S. dollar (USD) provided some support for USD/CAD after the Federal Reserve maintained its hawkish stance. Investors will focus on the number of initial jobless claims in the United States last week, the producer price index (PPI), and the speech of Federal Reserve official John Williams.

The Federal Reserve kept its benchmark lending rate in the range of 5.25%-5.50% for the seventh consecutive time at its June meeting on Wednesday, as widely expected by market participants. Fed Chairman Powell said at a press conference that the restrictive stance of monetary policy is having an impact on the inflation the Fed wants to see, but the central bank will wait for inflation to make enough progress. In addition, according to the Fed’s latest economic forecasts, Fed policymakers expect to cut interest rates only once this year, less than three times in March.

In terms of data, the U.S. consumer price index rose 3.3% year-on-year in May, compared with the previous value and expected value of 3.4% respectively. Core inflation, which excludes volatile food and energy prices, rose 3.4% in May from 3.6% in April, compared with expectations of 3.5%.

On the Canadian dollar front, Bank of Canada Governor Tiff Macklem said late Wednesday that there is a limit to the Bank of Canada’s divergence from the Federal Reserve (FED) on interest rates, but it is not approaching that limit at the moment. The Bank of Canada cut its benchmark interest rate by 25 basis points (bps) to 4.75% last week. The market has already priced in nearly 150 bps more rate cuts from the Bank of Canada over the next few years. The interest rate differential between Canada and the United States could boost USD/CAD and support USD/CAD in the short term.

USD latest articles

Popular exchange rates

foreign exchange

fxcurrencyconverter is a forex portal. The main columns are exchange rate, knowledge, news, currency and so on.

© 2023 Copyright