• USD/CAD drifts lower to 1.3640 in Wednesday’s early European session. 
  • The annual Canadian CPI inflation rate slowed to 2.7% in April from 2.9% prior, boosting the odds of the BoC June rate cut.
  • The Fed remains cautious and will wait for more encouraging data to ensure inflation is on course towards its target.

The USD/CAD pair weakens to 1.3640 amid the US Dollar (USD) consolidation on Wednesday during the early European session. The pair edges lower despite the recent softer Canadian CPI inflation data, which boosts the bets of a rate cut from the Bank of Canada (BoC) in June. Investors await the FOMC Minutes and the Federal Reserve’s (Fed) Goolsbee speech later in the day. 

Inflation in Canada cooled to 2.7% in April as food price growth slowed, Statistics Canada reported on Tuesday. The Canadian Consumer Price Index (CPI) inflation dropped to 2.7% YoY in April from 2.9% in March, in line with the market estimation. On a monthly basis, headline CPI inflation eased to 0.5% MoM in April from 0.6% in the previous reading. Additionally, the BoC’s core CPI rose 1.6% YoY in April, compared to a 2% increase recorded in March.

The easing inflation data has prompted speculation that the BoC will start cutting rates in the June meeting. Traders increased their bets for a rate cut on June 5 to nearly 55% from 39% before the data was released. The pace of interest rate cuts from the BoC and US Fed might exert some selling pressure on the Canadian Dollar (CAD) and act as a tailwind for USD/CAD. 

The Fed officials prefer to wait for more encouraging data to gain confidence that inflation is on course towards the Fed's 2% target. Atlanta Fed President Raphael Bostic said that the Fed has to be cautious about the first-rate move to ensure that inflation does not begin to bounce around. Meanwhile, Fed Governor Christopher Waller noted that he needs to see several more months of good inflation data before starting to lower borrowing costs. 

USD/CAD

Overview
Today last price 1.3644
Today Daily Change -0.0010
Today Daily Change % -0.07
Today daily open 1.3654
 
Trends
Daily SMA20 1.3673
Daily SMA50 1.3638
Daily SMA100 1.3556
Daily SMA200 1.357
 
Levels
Previous Daily High 1.3676
Previous Daily Low 1.3615
Previous Weekly High 1.3691
Previous Weekly Low 1.359
Previous Monthly High 1.3846
Previous Monthly Low 1.3478
Daily Fibonacci 38.2% 1.3652
Daily Fibonacci 61.8% 1.3638
Daily Pivot Point S1 1.3621
Daily Pivot Point S2 1.3587
Daily Pivot Point S3 1.356
Daily Pivot Point R1 1.3682
Daily Pivot Point R2 1.3709
Daily Pivot Point R3 1.3743

 

 

Share: Feed news

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


Recommended content

Editors’ Picks

EUR/USD fluctuates near 1.0750 as markets turn subdued

EUR/USD fluctuates near 1.0750 as markets turn subdued

EUR/USD continues to trade in a relatively tight channel at around 1.0750 in the American session on Wednesday. The pair struggles to finding direction with US markets remaining closed in observance of the Juneteenth Holiday.

EUR/USD News

GBP/USD stabilizes above 1.2700 after UK inflation data

GBP/USD stabilizes above 1.2700 after UK inflation data

GBP/USD clings to modest daily gains above 1.2700 on Wednesday. The data from the UK showed that annual inflation, as measured by the change in the Consumer Price Index, declined to 2% in May from 2.3% in April. The BoE will announce policy decisions on Thursday.

GBP/USD News

Gold extends sideways grind at around $2,330

Gold extends sideways grind at around $2,330

Gold (XAU/USD) struggles to capitalize on the previous day's bounce from the vicinity of the $2,300 mark and oscillates in a narrow band near $2,330. US bond markets remain closed in observance of the Juneteenth Holiday, limiting the pair's volatility.

Gold News

Polygon MATIC poised for 10% rally as momentum indicators signal strength

Polygon MATIC poised for 10% rally as momentum indicators signal strength

Polygon price formed a bullish divergence on a momentum indicator, signaling a reversal. On-chain data shows MATIC’s capitulation event occurred between June 12 and 18.

Read more

Investors' focus will be on Europe

Investors' focus will be on Europe

In the euro area, the EU commission will reveal against which countries it recommends opening an excessive deficit procedure (EDF) due to breaches of the EU fiscal rules.

Read more

Forex MAJORS

Cryptocurrencies

Signatures