USD/CAD recaptures 1.3700 as US Dollar rebounds, BoC policy eyed
- USD/CAD recovered to near 1.3700 after the US Dollar rebounded strongly.
- A delay in Israel’s planned ground attack in Gaza has eased the broader risk-off mood.
- The BoC is expected to keep interest rates unchanged at 5%.
The USD/CAD pair recovers from 1.3660 and recaptures the round-level resistance of 1.3700 in the late London session. The Loonie asset finds support as the US Dollar rebounds after discovering buying interest near 105.40.
Investors rush for the US Dollar and long-term bond yields as the focus shifts to the crucial United States economic data, which will be released this week. The US Dollar Index (DXY) has come closer to 106.00. The 10-year US Treasury yields rose sharply to 4.86%.
S&P500 futures generated significant gains in the European session, portraying a sharp revival in the risk appetite of the market participants. A delay in Israel’s planned ground attack in Gaza has eased the broader risk-off mood.
Investors await the speech from Federal Reserve (Fed) Chair Jerome Powell, which is scheduled for Wednesday. Jerome Powell is expected to reiterate the need to keep interest rates higher for a longer period to ensure the achievement of price stability. He is expected to keep hopes of further policy tightening alive if the US economy continues to remain resilient.
In the late New York session, the US S&P Global preliminary PMI for October will be keenly watched. As per the estimates, the Manufacturing PMI dropped to 49.5 against September’s reading of 49.8. The Services PMI is seen declining marginally below the 50.0 threshold to 49.9 versus the former release of 50.1.
On the Canadian Dollar front, the focus will be on the interest rate decision by the Bank of Canada (BoC), which is scheduled for Wednesday. The BoC is expected to keep interest rates unchanged at 5% as the Canadian economy is struggling for a firm footing amid a vulnerable demand outlook.
Author
Sagar Dua
FXStreet
Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.
