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Canadian dollar stays near two-month low versus US dollar
USD/CAD hovered around 1.3930 as oil volatility and expectations for Wednesday US CPI kept traders focused on the Fed’s rate outlook.
FXStreet reports USD/CAD was trading under pressure for a third straight day on Tuesday, but the move lacked follow-through selling as the US dollar held firmer ahead of Wednesday’s US Consumer Price Index (CPI) release.
At last check, USD/CAD was around 1.3930, near a two-month low. The Canadian dollar was also being pulled by swings in oil prices, with West Texas Intermediate around $81.50 after trading as high as $83.57 earlier in the day, and up more than 5% for the week.
FXStreet added that traders are watching for signs that the Strait of Hormuz could reopen under a proposed arrangement between Iran and Oman. Qatar’s Foreign Ministry spokesperson said talks between the two countries have reached an advanced stage, a development that could influence oil prices and, in turn, Canada’s inflation outlook.
Looking ahead, FXStreet said markets are waiting for US CPI to gain clarity on the Federal Reserve’s interest rate path, with the CME FedWatch tool indicating a 50% chance of a rate hike at the September meeting. On the Canadian side, it noted the week’s economic calendar is relatively light, leaving price action heavily driven by oil and broader market moves ahead of Canada’s inflation data next week.