- USD/CAD jumped to near 1.3700 as US Retail Sales remained robust in September.
- The Canadian Dollar weakened as soft inflation data prompted hopes of a steady BoC policy.
- The market mood remains cautious amid deepening Middle East tensions.
The USD/CAD pair finds stellar buying interest and jumps to near the round-level resistance of 1.3700 after the United States Census Bureau reported robust consumer spending data and Statistics Canada reported a decline in price pressures in September.
US Retail Sales expanded at a robust pace of 0.7%, boosted by higher automobile demand and spending on dining out. The economic data excluding automobiles rose by 0.6%, almost at a double pace from expectations. Robust retail demand could spurt consumer inflation expectations and create discomfort for Federal Reserve (Fed) policymakers.
After upbeat US Retail Sales data, the US Dollar Index (DXY) recovered strongly to near 106.50. While expectations for interest rates at 5.25-5.50% seem unchanged for November monetary policy as Fed policymakers see higher long-term bond yields sufficient to restrict spending and investment.
Going forward, the US Dollar will dance to the tune of the speech from Fed Chair Jerome Powell, which is scheduled for Thursday. Fed Powell is expected to provide cues about the likely monetary policy action.
The market mood remains downbeat amid deepening Middle East tensions. Persistent risks of intervention by Iran and Yemen in the Israel-Palestine conflict could worsen the situation further.
On the Canadian Dollar front, a decline in consumer inflation has prompted expectations that the Bank of Canada (BoC) will keep interest rates unchanged ahead. The monthly headline and core Consumer Price Index (CPI) contracted by 0.1% while investors forecasted a growth of 0.1%. The annual headline and core CPI softened to 3.8% and 2.8% respectively.
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
EUR/USD extends recovery beyond 1.0400 amid Wall Street's turnaround
EUR/USD extends its recovery beyond 1.0400, helped by the better performance of Wall Street and softer-than-anticipated United States PCE inflation. Profit-taking ahead of the winter holidays also takes its toll.
GBP/USD nears 1.2600 on renewed USD weakness
GBP/USD extends its rebound from multi-month lows and approaches 1.2600. The US Dollar stays on the back foot after softer-than-expected PCE inflation data, helping the pair edge higher. Nevertheless, GBP/USD remains on track to end the week in negative territory.
Gold rises above $2,620 as US yields edge lower
Gold extends its daily rebound and trades above $2,620 on Friday. The benchmark 10-year US Treasury bond yield declines toward 4.5% following the PCE inflation data for November, helping XAU/USD stretch higher in the American session.
Bitcoin crashes to $96,000, altcoins bleed: Top trades for sidelined buyers
Bitcoin (BTC) slipped under the $100,000 milestone and touched the $96,000 level briefly on Friday, a sharp decline that has also hit hard prices of other altcoins and particularly meme coins.
Bank of England stays on hold, but a dovish front is building
Bank of England rates were maintained at 4.75% today, in line with expectations. However, the 6-3 vote split sent a moderately dovish signal to markets, prompting some dovish repricing and a weaker pound. We remain more dovish than market pricing for 2025.
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.