- USD/CAD rises to 1.3660 due to the US Dollar’s recovery and firm speculation BoC’s rate-cut on Wednesday.
- The BoC is expected to announce a rate-cut move for the first time after two year-long policy-tightening stance.
- The next move in the US Dollar will be guided by US ISM Manufacturing PMI for May
The USD/CAD pair jumps to 1.3660 in Monday’s European session. The Loonie asset strengthens as the US Dollar (USD) extends recovery due to uncertainty among market participants ahead of a United States (US) data-packed week.
Market sentiment has improved due to stronger-than-expected China’s Caixin PMI data for May. However, an asset-specific action is recorded in the global economy. While risk-perceived currencies are facing pressure, S&P 500 futures have posted significant gains in the London session. The US Dollar Index (DXY) recovers to 104.70 but is still stuck inside Friday’s trading range.
10-year US Treasury yields tumble to 4.48% as market speculation for the Federal Reserve (Fed) to begin reducing interest rates from the September meeting improves. Positive change in Fed rate-cut prospects for September is driven by slower growth in the US Personal Spending data. In April, the consumer spending grew at a slower pace of 0.2% from the estimates of 0.3% and the former release of 0.7%.
This week, investors will focus on the US ISM Manufacturing and Services PMI and the Nonfarm Payrolls (NFP) data for May. In today’s session, investors will focus on the Manufacturing PMI data for May, which will be published at 14:00 GMT. The PMI is estimated to have improved to 49.8 from the former reading of 49.2. However, a figure below the 50.0 threshold is considered as contraction.
Meanwhile, the Canadian Dollar will dance to the tunes of the Bank of Canada’s (BoC) interest rate decision, which will be announced on Wednesday. The BoC is expected to announce an interest rate-cut decision for the first time since March 22 as it maintained a restrictive policy framework due to Covid-led inflation. Investors will also focus on fresh cues about the BoC’s rate-cut path beyond June’ meeting.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD looks at the RBA for near-term direction
AUD/USD resumed its rebound and briefly surpassed the 0.6600 barrier on the back of the renewed and marked resurgence of the downward bias in the US Dollar. Investors, in the meantime, expect the RBA to keep its rates unchanged on Tuesday.
EUR/USD: Price action hinges on the US election and the Fed
EUR/USD managed to trespass the key 1.0900 hurdle and print new highs following the Greenback’s offered stance as investors warmed up for the US election and the FOMC event later in the week.
Gold trades around $2,730
Gold price is on the defensive below $2,750 in European trading on Monday, erasing the early gains. The downside, however, appears elusive amid the US presidential election risks and the ongoing Middle East geopolitical tensions.
Ethereum Price Forecast: ETH struggles below $2,500 amid State of Michigan pension fund investment in ETH ETF
Ethereum (ETH) is trading near $2,420, down about 1% on Monday, but could bounce off a key descending trendline close to the $2,258 historically high demand zone.
US presidential election outcome: What could it mean for the US Dollar? Premium
The US Dollar has regained lost momentum against its six major rivals at the beginning of the final quarter of 2024, as tensions mount ahead of the highly anticipated United States Presidential election due on November 5.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.