Canadian Dollar languishes near two-week low as bullish USD offsets oil gains ahead of Fed
The USD/CAD pair retains its positive bias for the sixth straight day, trading near the 1.3930 area, a two-week high during the Asian session on Wednesday amid a bullish US Dollar (USD).
The USD/CAD currency pair maintained its bullish momentum for the sixth consecutive day, reaching a two-week high near the 1.3930 level on Wednesday. This upswing was driven by a strengthening US Dollar, as investors anticipated a 25 basis point rate hike from the Federal Reserve during its two-day policy meeting concluding on September 16.
The Fed's decision, along with updated economic projections and Chairman Kevin Warsh's comments, would provide crucial insights into the central bank's future policy trajectory. The Canadian Dollar, meanwhile, faced downward pressure due to expectations of a dovish stance from the Bank of Canada and escalating tensions in the Middle East, which bolstered the US Dollar's safe-haven appeal.
Crude oil prices hovered near their highest point since May, offering some support to the commodity-linked Canadian Dollar and limiting further bullish bets on the USD/CAD pair. For the USD/CAD pair to sustain a near-term appreciation, it needs to break above key technical levels, including the 100-day Simple Moving Average and the 38.2% Fibonacci retracement.
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