USD/CAD appreciates to near 1.3700 as Fed delays the expected timing of the rate cut

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.

Akhtar Faruqui FXStreet

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.

USD/CAD

Overview
Today last price	1.3696
Today Daily Change	0.0002
Today Daily Change %	0.01
Today daily open	1.3694

Trends
Daily SMA20	1.3699
Daily SMA50	1.3696
Daily SMA100	1.3618
Daily SMA200	1.3585

Levels
Previous Daily High	1.3719
Previous Daily Low	1.3675
Previous Weekly High	1.3764
Previous Weekly Low	1.3675
Previous Monthly High	1.3783
Previous Monthly Low	1.359
Daily Fibonacci 38.2%	1.3702
Daily Fibonacci 61.8%	1.3692
Daily Pivot Point S1	1.3673
Daily Pivot Point S2	1.3652
Daily Pivot Point S3	1.3628
Daily Pivot Point R1	1.3717
Daily Pivot Point R2	1.374
Daily Pivot Point R3	1.3761

Author

Akhtar Faruqui

FXStreet

Akhtar Faruqui is a Forex Analyst based in New Delhi, India. With a keen eye for market trends and a passion for dissecting complex financial dynamics, he is dedicated to delivering accurate and insightful Forex news and analysis.

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