USD/CAD holds above the 1.3500 mark ahead of Canadian CPI data

USD/CAD edges higher to 1.3506 amid the firmer USD.
Investors trimmed their bets on rate cut expectations from the Fed as the US January PPI data came in hotter than estimated.
Canada’s January CPI report will be released on Tuesday, which is estimated to ease in January.

Lallalit Srijandorn FXStreet

The USD/CAD pair trades on a stronger note above the 1.3500 psychological mark during the Asian session on Tuesday. The uptick of the pair is bolstered by the stronger US Dollar (USD). The Canadian inflation data will be in the spotlight on Tuesday and could trigger volatility in the market ahead of the FOMC Minutes. At press time, USD/CAD is trading at 1.3506, gaining 0.12% on the day.

The US January Producer Price Index (PPI) data rose at the largest increase since August 2023, indicating elevated inflationary pressure in the US economy. Investors lower their bets on the interest rate cuts from the Federal Reserve (Fed) and the expectation has shifted from May to June monetary policy meeting. The Federal Reserve Open Market Committee (FOMC) minutes for January’s policy meeting could provide some outlook about interest rates trajectory.

Canada’s January Consumer Price Index (CPI) will be due on Tuesday, which is forecast to ease from 3.4% YoY in December to 3.3% in January. The Bank of Canada (BoC) highlighted the outsized role housing has played in supporting inflation, and markets do not anticipate the BoC will cut interest rates before its June monetary policy decision.

Meanwhile, the rise of crude oil might underpin the commodity-linked Loonie and cap the upside of the USD/CAD pair. It’s worth noting that Canada is the largest oil exporter to the United States (US) and the Canadian Dollar (CAD) is particularly sensitive to fluctuations in oil prices

The Canadian CPI inflation data is due later on Tuesday. If the report shows a weaker-than-expected outcome, this could weigh on the Loonie. Later this week, investors will focus on the FOMC Minutes on Wednesday, along with the Fed’s Bostic and Bowman speeches.

USD/CAD

Overview
Today last price	1.3507
Today Daily Change	0.0016
Today Daily Change %	0.12
Today daily open	1.3491

Trends
Daily SMA20	1.3471
Daily SMA50	1.3411
Daily SMA100	1.3551
Daily SMA200	1.3478

Levels
Previous Daily High	1.3497
Previous Daily Low	1.3468
Previous Weekly High	1.3586
Previous Weekly Low	1.343
Previous Monthly High	1.3542
Previous Monthly Low	1.3229
Daily Fibonacci 38.2%	1.3486
Daily Fibonacci 61.8%	1.3479
Daily Pivot Point S1	1.3474
Daily Pivot Point S2	1.3457
Daily Pivot Point S3	1.3445
Daily Pivot Point R1	1.3502
Daily Pivot Point R2	1.3514
Daily Pivot Point R3	1.3531

Author

Lallalit Srijandorn

FXStreet

Lallalit Srijandorn is a Parisian at heart. She has lived in France since 2019 and now becomes a digital entrepreneur based in Paris and Bangkok.

EUR/USD meets resistance around 1.1700

EUR/USD sets aside part of the recent sharp sell-off, gathering fresh steam on the back of the intense downward bias in the US Dollar. The Greenback’s marked pullback comes on the back of renewed concerns over the Fed’s independence, all ahead of Tuesday’s key US CPI data release.

GBP/USD looks supported around 1.3380

GBP/USD kicks off the week on a firmer note, retracing part of its recent pullback and turning its attention back to the key 1.3500 level. The pair is being supported by renewed weakness in the Greenback, after fresh criticism from the US administration directed at Fed Chair Powell revived concerns about the Federal Reserve’s independence.

Gold smashes $4,600 record as Powell charges ignite haven frenzy

Gold rallies to new record high past $4,600 on Monday due to safe-haven flows courtesy of the US Department of Justice, which presented charges against the Federal Reserve Chair Jerome Powell over the building’s renovations. At the time of writing, XAU/USD trades at $4606, up more than 2%.