- USD/CAD gains positive traction for the sixth successive day amid renewed USD buying.
- The overnight slump in Oil prices undermines the Loonie and lends support to the pair.
- Traders now look forward to the release of the FOMC minutes for a short-term impetus.
The USD/CAD pair scales higher for the sixth successive day on Wednesday and climbs to the 1.3670-1.3675 area, or its highest level since August 19 during the first half of the European session amid renewed US Dollar (USD) buying.
Following a brief consolidation over the past two days, the USD attracts fresh buyers amid firming expectations that the Federal Reserve (Fed) will go slow on interest rate cuts. In fact, traders are currently pricing in over an 85% chance that the US central bank will lower borrowing costs by 25 basis points in November amid signs of a still resilient labor market. This allows the yield on the benchmark 10-year US government bond to hold above the 4.0% threshold, which lifts the USD to its highest level since August 16 and continues to act as a tailwind for the USD/CAD pair.
Meanwhile, news of a possible ceasefire between Lebanon's Hezbollah and Israel lowered the geopolitical risk premium in the markets. This led to the overnight slump in Crude Oil prices, which, along with bets for a jumbo interest rate cut by the Bank of Canada (BoC) later this month, undermines the commodity-linked Loonie and boosts the USD/CAD pair amid some follow-through technical buying above the 200-day Simple Moving Average (SMA).
Moving ahead, investors now look forward to the release of the FOMC meeting minutes, due later during the North American session. This, along with the US Consumer Price Index (CPI) and the US Producer Price Index (PPI) on Thursday and Friday, respectively, will be looked upon for cues about the Fed's rate-cut path. This, in turn, will drive the USD demand in the near term. Apart from this, Canadian monthly employment details on Friday should provide some meaningful impetus to the USD/CAD pair and help in determining the next leg of a directional move.
Economic Indicator
FOMC Minutes
FOMC stands for The Federal Open Market Committee that organizes 8 meetings in a year and reviews economic and financial conditions, determines the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth. FOMC Minutes are released by the Board of Governors of the Federal Reserve and are a clear guide to the future US interest rate policy.
Read more.Next release: Wed Oct 09, 2024 18:00
Frequency: Irregular
Consensus: -
Previous: -
Source: Federal Reserve
Minutes of the Federal Open Market Committee (FOMC) is usually published three weeks after the day of the policy decision. Investors look for clues regarding the policy outlook in this publication alongside the vote split. A bullish tone is likely to provide a boost to the greenback while a dovish stance is seen as USD-negative. It needs to be noted that the market reaction to FOMC Minutes could be delayed as news outlets don’t have access to the publication before the release, unlike the FOMC’s Policy Statement.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD retreats from multi-month tops, back near 1.1050
Following a move to six-month highs in the 1.1140-1.1150 band, EUR/USD now gives away part of those gains on the back of a mild attempt of recovery in the US Dollar as investors continue to assess President Trump's recent annoucements.
GBP/USD off highs, remains well bid near 1.3100
GBP/USD now partially sets aside its earlier advance in favour of fresh peaks just north of the 1.3200 mark, challenging the 1.3100 neighborhood on the back of a tepid bounce from recent multi-month lows in the Greenback.
Gold looks offered near $3,100
Prices of Gold remain on the defensive on Thursday, hovering around the $3,100 region per troy ounce and retreating from earlier all-time peaks near the $3,170 level, all against the backdrop of investors' assessment of "Liberation Day".
SOL is the winner as Solana chain turns into battleground for meme coin launchpad and DEX
Solana (SOL) gains nearly 2% in the last 24 hours and trades at 118.28 at the time of writing on Thursday. A Decentralized Exchange (DEX) and a meme coin launchpad built on the Solana blockchain have waged a war for users and compete for the trade volume on the chain.
Trump’s “Liberation Day” tariffs on the way
United States (US) President Donald Trump’s self-styled “Liberation Day” has finally arrived. After four straight failures to kick off Donald Trump’s “day one” tariffs that were supposed to be implemented when President Trump assumed office 72 days ago, Trump’s team is slated to finally unveil a sweeping, lopsided package of “reciprocal” tariffs.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.