USD/CAD aims stability above 1.3500 amid broader strength in US Dollar
|- USD/CAD aims to stabilize above 1.3500 amid sheer strength in the US Dollar.
- US Durable Goods Orders surprisingly rose by 0.2% while investors anticipated a decline of 0.5%.
- The optimism about the US economic outlook seems uncertain as Fed policymakers support more interest rates.
The USD/CAD pair faces some selling pressure while attempting to extend upside above the immediate resistance of 1.3540 in the early New York session. The Loonie asset struggles to extend recovery as the US Dollar faces a nominal sell-off after registering a fresh 10-month high at 106.45.
S&P500 opens on a positive note as investors shrug off risks associated with potential government shutdown. The broader market mood is still cautious as the Federal Reserve (Fed) is expected to keep interest rates higher for a longer period. The US Dollar may resume its upside journey as the US Durable Goods Orders data for August outperformed expectations.
Orders for core goods surprisingly expanded by 0.2% while investors anticipated a decline of 0.5%. In the month of July, the economic data contracted significantly by 5.6%. An expansion in orders book for core goods indicates some sort of optimism among firms despite higher interest rates by the Federal Reserve (Fed).
The optimism about the US economic outlook seems uncertain as Fed policymakers are consistently supporting more interest rates from the central bank. Minneapolis Fed Bank President Neel Kashkari said that there was a risk interest rates might have to go higher but added that it was hard to know. Earlier, Fed Governor Kashkari commented that the economy is fundamentally much stronger than projected. Therefore, more rates seem warranted and are needed to remain high to cool things off.
On the oil front, the oil price prints a fresh 10-month high at $92.66 as investors see demand rising due to a higher consumption outlook. Meanwhile, investors await the weekly oil inventories data to be reported by the US Energy Information Administration (EIA), which will be published at 14:30 GMT. It is worth noting that Canada is the leading exporter of oil to the United States and higher oil prices support the Canadian Dollar.
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