- USD/CAD attempts to continue its winning streak on Monday.
- Fed member Bostic forecasted only one interest rate cut instead of his earlier projection of two rate cuts in 2024.
- The higher WTI price might have provided support for the Canadian Dollar.
USD/CAD maintains its position in positive territory after paring back some gains on Monday. The pair trades higher around 1.3600 during the Asian trading session, following hawkish remarks from Federal Reserve Bank of Atlanta President Raphael Bostic on Friday. Bostic adjusted his earlier projection of two interest rate cuts this year, now forecasting only one, citing persistent inflation and stronger-than-expected economic indicators.
Moreover, the Canadian Dollar (CAD) faced downward pressure as the Bank of Canada (BoC) hinted at potential rate cuts in 2024 in its latest meeting minutes. Deputy Governor Toni Gravelle reaffirmed the central bank's intention for quantitative tightening to conclude by 2025, highlighting its sustainability amidst gradual interest rate reductions.
The CAD receives support from higher Crude oil prices, which in turn limits the losses of the USD/CAD pair. Additionally, better-than-anticipated Canadian Retail Sales data might have contributed to bolstering the Canadian Dollar.
The US Dollar Index (DXY) declines to near 104.40 as the 2-year and 10-year yields on US Treasury bonds hold at 4.60% and 4.21%, respectively, at the time of reporting. Despite the uptick in US Treasury yields, the US Dollar (USD) fails to find support.
Federal Reserve Chair Jerome Powell mentioned during a press conference, that an unexpected increase in unemployment could prompt the central bank to consider reducing interest rates. Powell also reassured markets that the Federal Reserve would not hastily react to consecutive months of heightened inflation figures.
Market participants will likely monitor the release of Gross Domestic Product (GDP) data for the fourth quarter of 2023 from the United States (US). Additionally, attention will be on Canadian GDP data for January, scheduled for release on Thursday.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.