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USD/CAD grinds higher above 1.3650 ahead of BoC Macklem speech, US CPI data

  • Inflation expectations in the US dipped, as reported by the NY Fed.
  • USD/CAD traders are eyeing a speech of Bank of Canada Governor Tiff Macklem.
  • Consumer Price Index in the United States is forecasted to fall, which would weigh on the US Dollar.

The USD/CAD remains positive during the day amidst a risk-on impulse, ahead of Tiff Macklem’s speech around 20:40 GMT, ahead of a crucial inflation report in the United States (US), as the Federal Reserve (Fed) last monetary policy meeting of 2022 looms. Also, inflation expectations revealed by the New York Fed cooled, which could be a prelude to Tuesday’s report. At the time of writing, the USD/CAD is trading at 1.3657.

Inflation expectations cooled, according to the New York Fed

Wall Street is set to finish Monday’s session positively. The latest data released by the New York Federal Reserve showed that household inflation expectations are expected to dip to 5.2% over the following 12 months, down from November’s 5.7%, according to the Survey of Consumer Expectations published Monday.

In the meantime, the release of the US Consumer Price Index (CPI) could be a significant indicator for determining the trajectory of USD/CAD. With forecasts predicting a decrease from 7.7% to 7.3% and core CPI anticipated to decline from 6.3% to 6%, both readings on an annual pace, if results allude towards diminishing inflation conditions, it may lead to the USD losing more strength in comparison with its counterpart, the Canadian Dollar (CAD).

In the meantime, the US Dollar Index, which tracks the greenback’s performance against a basket of peers, is rising 0.25% at 105.198, underpinned by high US Treasury bond yields.

Aside from this, on the Canadian side, the Bank of Canada (BoC) lifted rates by 50 basis points to 4.25% at its last monetary policy meeting. As reported by Reuters, money market futures expect the BoC to hike by a lesser size of 25 bps on January 25. At around 20:40 GMT, we will hear from BoC Governor Macklem, who hosts a fireside chat on the economic outlook, which we look for a similar tone to last week’s Economic Progress Report.

USD/CAD Key Technical Levels

USD/CAD

Overview
Today last price1.3657
Today Daily Change0.0010
Today Daily Change %0.07
Today daily open1.3647
 
Trends
Daily SMA201.3455
Daily SMA501.3565
Daily SMA1001.333
Daily SMA2001.3053
 
Levels
Previous Daily High1.3692
Previous Daily Low1.3569
Previous Weekly High1.37
Previous Weekly Low1.3385
Previous Monthly High1.3808
Previous Monthly Low1.3226
Daily Fibonacci 38.2%1.3645
Daily Fibonacci 61.8%1.3616
Daily Pivot Point S11.358
Daily Pivot Point S21.3513
Daily Pivot Point S31.3458
Daily Pivot Point R11.3703
Daily Pivot Point R21.3759
Daily Pivot Point R31.3826

Author

Christian Borjon Valencia

Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.

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