USD/CAD inches lower to near 1.3550 as US Dollar declines on downbeat US yields

USD/CAD surged by 0.85% on an unexpected upside in US inflation on Tuesday.
The higher Crude oil prices are contributing support for the Canadian Dollar.
The probability of the Fed avoiding rate adjustment in March surged to 93%.

Akhtar Faruqui FXStreet

USD/CAD retreats after Tuesday’s surge, edging lower to near 1.3550 during the early European session on Wednesday. The decline in the US Dollar (USD) is attributed to the decrease in US Treasury yields, thereby weakening the USD/CAD pair.

The Canadian Dollar (CAD) appears to have strengthened against the US Dollar, possibly buoyed by higher Crude oil prices. West Texas Intermediate (WTI) oil price is poised to continue its winning streak, trading around $77.50 per barrel at the time of writing. Despite facing challenges, the price of Crude oil has managed to recover its intraday losses.

On Tuesday, the USD/CAD pair surged by 0.85%, driven by the unexpected upside in US inflation for January. The market sentiment has shifted significantly, with expectations of no rate adjustment by the Federal Reserve in March surging to 93%, while investors are now considering the possibility of a rate cut by the Federal Reserve (Fed) in June.

The US headline Consumer Price Index (CPI) exceeded expectations, coming in at 3.1%, although slightly lower than the previous rate of 3.4%. Meanwhile, the US Core CPI (YoY) remained unchanged at 3.9%, contrary to market expectations of a decline to 3.7% in January.

Recent Canadian employment data has painted a healthier picture of the labor market, potentially leading the Bank of Canada (BoC) to delay their forecasts on rate cuts until June from April. However, BoC Governor Tiff Macklem indicated that the central bank's focus has shifted from debating whether interest rates are high enough to discuss how long rates need to remain at current levels.

USD/CAD: additional important levels

Overview
Today last price	1.3555
Today Daily Change	-0.0015
Today Daily Change %	-0.11
Today daily open	1.357

Trends
Daily SMA20	1.3468
Daily SMA50	1.3418
Daily SMA100	1.3553
Daily SMA200	1.3477

Levels
Previous Daily High	1.3586
Previous Daily Low	1.3438
Previous Weekly High	1.3544
Previous Weekly Low	1.3413
Previous Monthly High	1.3542
Previous Monthly Low	1.3229
Daily Fibonacci 38.2%	1.3529
Daily Fibonacci 61.8%	1.3494
Daily Pivot Point S1	1.3476
Daily Pivot Point S2	1.3383
Daily Pivot Point S3	1.3328
Daily Pivot Point R1	1.3625
Daily Pivot Point R2	1.368
Daily Pivot Point R3	1.3773

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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