USD/CAD attracts some buyers above the 1.3500 mark on the firmer US Dollar, decline in oil price
|- USD/CAD edges higher to 1.3512 in Monday’s Early European session.
- The cooler-than-expected Canadian inflation numbers might convince the Bank of Canada to cut rates sooner than expected.
- The Fed's Waller said the central bank should delay rate cuts in the coming months to see more evidence of inflation data.
The USD/CAD pair attracts some buyers above the 1.3500 mark during the Asian session on Monday. The recovery of the pair is bolstered by renewed US Dollar (USD) demand. Investors await the Canadian Current Account and the US Gross Domestic Product annualized for the fourth quarter (Q4) for fresh impetus. At press time, USD/CAD is trading at 1.3512, adding 0.07% on the day.
The Canadian Consumer Price Index (CPI) slowed more than expected to 2.9%. It’s the first time inflation has fallen into the Bank of Canada’s (BoC) target range since mid-2021. The cooler-than-expected inflation numbers suggested the door to interest rate cuts could open much sooner than the central bank expected. Meanwhile, the corruptive move in oil prices might weigh on the commodity-linked loonie.
On the other hand, the hawkish comments from Federal Reserve (Fed) officials about keeping the policy rate higher for longer provided some support to the US Dollar (USD). Last week, Fed Governor Christopher Waller said the Fed should delay interest rate cuts by at least a few more months to see more evidence of inflation data.
Moving on, market participants will focus on the US GDP growth number for Q4 and the Canadian Q4 Current Account. On Thursday, the Canadian GDP and the US Core Personal Consumption Expenditures Price Index (Core PCE) will be due
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