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- USD/CAD posted modest gains near 1.3655 in the early Asian session on Tuesday.
- Bank of Canada Governor Tiff Macklem said the Canadian economy is on track for a soft landing.
- Investors are awaiting the release of the US GDP growth figure on Thursday and the personal consumption expenditures price index on Friday.
The USD/CAD pair remains on the defensive around the 1.3655 level during the early Asian session on Tuesday. The US Dollar Index (DXY) is retreating from its highest levels in almost two months to 105.50, putting some selling pressure on the pair. Investors will focus on the Canadian Consumer Price Index (CPI) inflation report, which is scheduled for release later today. Climate prediction It cools down a bit throughout the year until May.
Late Monday, Bank of Canada (BoC) Governor Tiff Macklem said the Canadian economy is on track for a soft landing as the central bank does not need a significant rise in the unemployment rate to meet its inflation target. Macklem also stated that it is reasonable to expect additional interest rate cuts. This speech came two weeks after the Central Bank of Canada reduced the interest rate to 4.75% from 5%, which is the first interest rate cut in four years. The Canadian dollar (CAD) strengthened, although investors expect the Bank of Canada to make further interest rate cuts this year.
At the same time, the price of crude rose Oil prices Amid renewed hopes for a recovery in fuel demand during the summer, commodity-related support continues Color me. It is worth noting that higher oil prices could support the Canadian dollar as Canada is the main exporter of crude oil to the United States United State.
On the US dollar front, US Federal Reserve officials maintain a cautious stance on interest rate cuts, highlighting that their decisions will remain data-driven. The Fed must continue to work to fully restore price stability without painful disruption to the economy, San Francisco Federal Reserve Bank President Mary Daly said Monday. Daly added that while the central bank still has “more work to do” to reduce inflation, inflation is not the only risk it faces.
Traders will benefit from crucial US economic data this week. The first quarter US GDP review will be released on Thursday. The Personal Consumption Expenditures (PCE) price index will be published on Friday. Traders are now pricing with 66% odds Nourish it Rate cut in September, up from 59.5% at the end of last week, according to the CME FedWatch tool.
