USD/CAD extends its downside below 1.3610 ahead of Canadian CPI data

FXStreet
Updated May 20, 2024 07:21
Mitrade

■USD/CAD trades on a softer note near 1.3605 in Monday’s early Asian session. 

■Canada’s CPI inflation data is estimated to ease to 2.8% YoY in April from 2.9% YoY in the previous reading. 

■The Fed is expected to keep the rate on hold until September, despite cooler-than-expected US inflation data.


The USD/CAD pair extended its downside around 1.3605 during the early European session on Monday. The weaker US Dollar (USD) on the prospect of a Federal Reserve (Fed) rate cut weighs on the pair. Investors await the Canadian Consumer Price Index (CPI) inflation data for fresh impetus, which is expected to ease to 2.8% YoY in April from 2.9% YoY in the previous reading. 

The markets expect the Bank of Canada (BoC) to begin rate cuts in June or July, ahead of the Fed's first move. However, Canada’s CPI inflation report on Tuesday will be in the spotlight, which could provide some hints about the next rate decision. The central bank might need to see easing inflation to be convinced to cut interest rates next month. Investors are currently pricing in nearly 40% odds of a BoC rate cut in June. This, in turn, might exert some pressure on the Loonie and cap the pair’s downside. 

On the other hand, the US Fed is anticipated to keep the rate on hold until September, despite cooler-than-expected US inflation data. Cleveland Fed President Loretta Mester, one of the FOMC’s more hawkish members, said that the Fed's current monetary policy stance is appropriate as it continues to assess incoming economic data. Additionally, Fed Governor Michelle Bowman said the policy is restrictive, but she is willing to hike rates if inflation stalls or reverses. The wait-and-see mode of Fed officials is likely to support the USD. 
 

USD/CAD


Overview
Today last price 1.3606
Today Daily Change -0.0006
Today Daily Change % -0.04
Today daily open 1.3612
 
Trends
Daily SMA20 1.3677
Daily SMA50 1.3632
Daily SMA100 1.3549
Daily SMA200 1.3569
 
Levels
Previous Daily High 1.3644
Previous Daily Low 1.3601
Previous Weekly High 1.3691
Previous Weekly Low 1.359
Previous Monthly High 1.3846
Previous Monthly Low 1.3478
Daily Fibonacci 38.2% 1.3618
Daily Fibonacci 61.8% 1.3628
Daily Pivot Point S1 1.3594
Daily Pivot Point S2 1.3576
Daily Pivot Point S3 1.3551
Daily Pivot Point R1 1.3637
Daily Pivot Point R2 1.3662
Daily Pivot Point R3 1.3679

* The content presented above, whether from a third party or not, is considered as general advice only.  This article should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments.

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