Canadian Dollar eases from two-month high as USD preserves weekly gains ahead of US CPI
The USD/CAD pair ticks higher during the Asian session on Wednesday, snapping a three-day losing streak to the 1.3915 area or its lowest level since June 10. Spot prices, however, lack bullish conviction and trade around 1.3930, awaiting the release of the latest US inflation figures.
The USD/CAD currency pair experienced a brief respite from a three-day decline, settling near 1.3915, its lowest point since mid-June. The pair, currently hovering around 1.3930, is awaiting the release of key US economic indicators, the Consumer Price Index (CPI) and Producer Price Index (PPI). These reports will offer insights into the Federal Reserve's (Fed) future monetary policy stance, which will influence the demand for the US Dollar (USD) and subsequently impact the USD/CAD pair.
However, a mix of forces may deter traders from adopting bullish positions or expecting significant appreciation. Recent escalation of attacks on vessels in the Red Sea and Bab el-Mandeb Strait by Iran-backed Houthi rebels may have further contributed to the prevailing uncertainty, bolstering the US Dollar due to its status as a safe-haven currency.
The USD/CAD pair is currently trading just above the 100-day Simple Moving Average (SMA) and the 50.0% Fibonacci retracement of the recent rally, indicating potential support ahead. Should the pair break below the 100-day SMA and the 50.0% retracement, it may face further downside towards the 61.8% Fibonacci level and beyond.
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