- USD/CAD continues to move on a downward trajectory on positive market sentiment.
- Canadian Dollar receives support from the rebound in the WTI price.
- Investors price in 85 basis points interest rate cuts by the Fed in 2024.
USD/CAD extends its losses for the third consecutive session, trading lower around 1.3600 psychological level during the Asian session on Tuesday. The rebound in Crude oil prices and positive market sentiment provide some support for the Canadian Dollar (CAD).
Western Texas Intermediate (WTI) price has managed to break a four-day losing streak, hovering around $75.30 per barrel at the moment. All eyes are on the upcoming crucial meeting of OPEC+, where there's widespread anticipation of a decision to deepen and extend cuts to oil production.
The US Dollar Index (DXY) has hit its lowest point since late August, reaching 103.07 on Tuesday. The downward trend persists, driven by a decrease in US Treasury yields, particularly with the 2 and 10-year bond yields easing to 4.87% and 4.40%, respectively, at the moment.
US Dollar receives downward pressure as the traders factor in almost 85 basis points of cuts in 2024 by the Federal Reserve (Fed). Additionally, the risk-on sentiment is reinforced by the latest report from the US Census Bureau, indicating a notable 5.6% drop in New Home Sales for October at 679K, falling short of the market consensus of 725K.
Looking ahead, investors will likely focus on Canada's Gross Domestic Product (GDP) on Thursday, followed by Net Change in Employment on Friday. Meanwhile, on Tuesday, attention is on US data, including the Housing Price Index and CB Consumer Confidence. Additionally, speeches from Federal Reserve (Fed) officials will provide valuable insights into the central bank's perspective on the economic landscape.
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