USD/CAD trades sideways below the 1.3600 mark, BoC rate decision, US Services PMI eyed


  • USD/CAD remains flat around 1.3595 following the US and Canada Labor Day holiday.
  • Market players speculate on a less aggressive Federal Reserve (Fed) stance following the mixed economic data results.
  • BoC is expected to maintain its key interest rate unchanged at 5.00% on Wednesday.

The USD/CAD pair consolidates its losses below the 1.3600 mark during the early Asian trading hours on Tuesday. The major pair currently trades near 1.3595, up 0.03% for the day. The pair’s move is limited following the US and Canada Labor Day holiday. Investors await the Bank of Canada (BoC) interest rate decision and markets anticipate an unchanged in policy.

Last week, US economic data displayed mixed results. August's Nonfarm Payrolls (NFP) came in at 187K, exceeding expectations of 170K and the previous reading of 157K. Nevertheless, the unemployment rate fell substantially to 3.8%, compared to the market consensus and the previous rate of 3.5%. The US Manufacturing PMI came in at 47.6 versus 46.4 previously and exceeded market expectations of 47.0.

Fed Chairman Jerome Powell stated at the Jackson Hole Symposium that a potential additional rate hike would be depending on incoming data. However, Market players bet on a less aggressive Federal Reserve (Fed) stance following the mixed economic data results. The odds of holding an interest rate at the September meeting remain at 93%, according to the CME FedWatch Tool. This, in turn, might cap the upside in the USD and act as a headwind in the USD/CAD pair.

About the data last week, Canadian real Gross Domestic Product (GDP) Annualized for the second quarter contracted at 0.2% YoY against the previous reading of 2.6%. The growth number was worse-than-expected of a 1.2% expansion. The downbeat Canadian data exerted some selling pressure on the Canadian Dollar (CAD).

The markets will shift their attention to the BoC interest rate decision on Wednesday. BoC is expected to maintain its key interest rate unchanged at 5.00% on Wednesday and hold at that level until at least the end of March 2024, according to a Reuters poll. Meanwhile, a rise in oil price lifts the Canadian Dollar against its rivals as Canada is the largest exporter of crude to the US.

Looking ahead, the BoC interest rate decision will be in the spotlight. Later this week, the US ISM Services PMI for August will be released on Wednesday with an expectation to grow to 52.6. On Friday, BoC's Governor Tiff Macklem's speech and the Canadian Unemployment rate might offer some hints about the further monetary policy for the entire year and the data could give a clear direction for the USD/CAD pair.

 

USD/CAD

Overview
Today last price 1.3596
Today Daily Change 0.0002
Today Daily Change % 0.01
Today daily open 1.3594
 
Trends
Daily SMA20 1.3514
Daily SMA50 1.3346
Daily SMA100 1.3396
Daily SMA200 1.3464
 
Levels
Previous Daily High 1.3613
Previous Daily Low 1.3489
Previous Weekly High 1.3637
Previous Weekly Low 1.3489
Previous Monthly High 1.364
Previous Monthly Low 1.3184
Daily Fibonacci 38.2% 1.3566
Daily Fibonacci 61.8% 1.3536
Daily Pivot Point S1 1.3518
Daily Pivot Point S2 1.3442
Daily Pivot Point S3 1.3395
Daily Pivot Point R1 1.3642
Daily Pivot Point R2 1.3689
Daily Pivot Point R3 1.3765

 

 

Share: Feed news

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


Recommended content

Editors’ Picks

EUR/USD stays vulnerable near 1.0600 ahead of US inflation data

EUR/USD stays vulnerable near 1.0600 ahead of US inflation data

EUR/USD remains under pressure near 1.0600 in European trading on Wednesday. The pair faces headwinds from the recent US Dollar upsurge, Germany's political instability and a cautiou market mood, as traders look to US CPI data and Fedspeak for fresh directives. 

EUR/USD News
GBP/USD falls to near 1.2750 ahead of BoE Mann speech

GBP/USD falls to near 1.2750 ahead of BoE Mann speech

GBP/USD extends its losing streak for the fourth successive session, trading around 1.2740 during the Asian hours on Wednesday. This downside of the pair is attributed to a stronger US Dollar amid optimism around the Trump trades.

GBP/USD News
Gold price sticks to gains above $2,600 amid some repositioning ahead of US CPI

Gold price sticks to gains above $2,600 amid some repositioning ahead of US CPI

Gold price staged a notable recovery from a nearly two-month low touched on Tuesday. Elevated US bond yields and a bullish USD might cap gains for the non-yielding XAU/USD. Traders now look forward to the crucial US consumer inflation figures for a fresh impetus. 

Gold News
US CPI data preview: Inflation expected to rebound for first time in seven months

US CPI data preview: Inflation expected to rebound for first time in seven months

The US Consumer Price Index is set to rise 2.6% YoY in October, faster than September’s 2.4% increase. Annual core CPI inflation is expected to remain at 3.3% in October. The inflation data could significantly impact the market’s pricing of the Fed’s interest rate outlook and the US Dollar value.

Read more
Five fundamentals: Fallout from the US election, inflation, and a timely speech from Powell stand out

Five fundamentals: Fallout from the US election, inflation, and a timely speech from Powell stand out Premium

What a week – the US election lived up to their hype, at least when it comes to market volatility. There is no time to rest, with politics, geopolitics, and economic data promising more volatility ahead.

Read more
Best Forex Brokers with Low Spreads

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.

Read More

Forex MAJORS

Cryptocurrencies

Signatures