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USD/CAD slips as Fed-hike odds hinge on upcoming CPI

Canadian support improves as WTI trades near $97.2 per barrel, while traders look to Friday CPI after August PPI showed producer inflation acceleration.

Reported · Written up by our desk · Major Pairs

USD/CAD gave back earlier gains as the US dollar lost momentum, trading around 1.3815 after an intraday high of 1.3835, according to an FXStreet market note.

The move came despite data showing US producer inflation picked up in August. The US PPI rose 0.4% month over month, and annual producer inflation increased to 5.4%, while core PPI rose 0.2% and annual core producer inflation climbed to 4.6%.

FXStreet said the figures keep a Fed rate hike in play, with CME FedWatch pricing in about a 64.0% probability of a 25 basis-point increase at the September 15 to 16 meeting. Traders are now awaiting Friday’s CPI report for a clearer signal on whether another increase is likely.

Oil prices provided some lift for the Canadian dollar, FXStreet added, noting that WTI is around $97.2 per barrel, up more than 8% for the week. The 10-year US Treasury yield was around 4.92%, its highest level since November 2023, but the note said rising yields did not fully offset the dollar’s softness.

Latest closeWTI crude $97.01 ▲4.3%

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