• 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

 

 

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