- USD/CAD broke its losing streak as higher-than-expected US PMI data supported the US Dollar.
- Fed’s Neel Kashkari argued that it will probably take a year or two to get inflation back to 2%.
- Higher Crude Oil prices could limit the downside of the commodity-linked Canadian Dollar.
USD/CAD halts its six-day losing streak, trading around 1.3700 during the Asian session on Monday. On Friday, a higher-than-expected US Purchasing Managers Index (PMI) boosted the US Dollar (USD), underpinning the USD/CAD pair.
The US Composite PMI for June surpassed expectations, rising to 54.6 from May’s reading of 54.5. This figure marked the highest level since April 2022. The Manufacturing PMI increased to a reading of 51.7 from a 51.3 figure, exceeding the forecast of 51.0. Similarly, the Services PMI rose to 55.1 from 54.8 in May, beating the consensus estimate of 53.7.
The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against six major currencies, edges higher due to the Federal Reserve (Fed) officials delaying the anticipated timing of the first interest rate cut this year. Fed Bank of Minneapolis President Neel Kashkari argued on Thursday that it will probably take a year or two to get inflation back to 2%, per Reuters.
According to the CME FedWatch Tool, investors are pricing in nearly 65.9% odds of a Fed rate cut in September, compared to 70.2% a week earlier.
On Loonie’s front, the upward correction in crude Oil prices could limit the downside of the commodity-linked Canadian Dollar (CAD). Geopolitical tensions are supporting Oil prices, with Israeli troops advancing deeper into Gaza in the Middle East, while Ukrainian drone attacks on Russian refineries persistently disrupt supply.
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 maintains its bullish bias near 1.1500, Fed eyed
EUR/USD advances modestly on Fed-day, hovering around the 1.1500 zone against the backdrop of a tepid retracement in the US Dollar. Market participants, in the meantime, remain cautious ahead of the Fed’s interest rate decision later in the European evening.
GBP/USD looks consolidative around 1.3450, Dollar stays offered
GBP/USD now seems to have embarked on a consolidative range in the mid-1.3400s as investors continue to digest the recently released UK inflation data, while the soft performance of the Greenback so far underpins Cable’s daily uptick.
Gold extends its sidelined mood around $3,400 prior to the FOMC event
Gold trades with a positive bias and now appears flat near the $3,400 mark per troy ounce on Wednesday. Rising geopolitical tensions in the Middle East, along with continuing trade-related uncertainty, continue to weigh on market confidence and help the precious metal contain its losses ahead of the Fed rate announcement.
Federal Reserve expected to stand pat as markets look for hints of potential interest rate cuts
Market participants widely anticipate the US central bank to leave policy settings unchanged for the fourth consecutive meeting, after cutting the interest rate by 25 basis points (bps) to the 4.25%-4.50% range in December.
Bitcoin, Ethereum and XRP defend key support on sixth day of Israel-Iran war, what to expect
Bitcoin (BTC), Ethereum (ETH), and XRP are holding steady above key support levels. The top three cryptocurrencies have weathered the geopolitical tension and macroeconomic events of the past week.
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.