• Mon. May 20th, 2024

USD/CAD gains momentum above 1.3570, eyes on Fed rate decision

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  • USD/CAD holds positive ground near 1.3578 in Wednesday’s Asian session. 
  • Fed is anticipated to keep rates steady in a range of 5.25% to 5.5% at its policy meeting on Wednesday. 
  • The downbeat Canada’s CPI inflation data boosted expectations for a June rate cut from the BoC.

The USD/CAD pair gains momentum above the mid-1.3500s during the early Asian trading hours on Wednesday. The uptick of the pair is bolstered by the firmer US Dollar (USD) and cooler-than-expected Canadian Consumer Price Index (CPI) inflation data. Investors will closely monitor the Federal Reserve interest rate decision on Wednesday, with no change in rate expected. At the press time, the pair is trading at 1.3578, up 0.09% on the day.

The Fed is likely to keep rates at a two-decade high in a range of 5.25% to 5.5% at its two-day policy meeting on Wednesday and stay focused on sticky inflation. According to the CME FedWatch Tool, markets have priced in three quarter-point rate cuts this year, with 63% odds that they will begin in June

About the data, the US Census Bureau revealed on Tuesday that New Home Sales improved to 10.7% MoM in February from a 12.3% fall in January. Meanwhile, Building Permits rose to 1.9% from the previous reading of a 0.3% decline.

On the other hand, weaker-than-expected Canada’s CPI inflation data boosted expectations for a June rate cut from the Bank of Canada (BoC), which exerts some selling pressure on the Canadian Dollar (CAD). Following the data, money markets have priced in a 75% chance that the BoC will start cutting rates in June, up from 50% before the release.

On Tuesday, the headline Canadian CPI figure rose 2.8% YoY in February, while the Core CPI figure eased to 2.1% in February from 2.4% in January. On a monthly basis, the CPI figure climbed 0.3% MoM compared to expectations for a 0.6% increase.

Looking ahead, the Fed’s monetary policy on Wednesday will take center stage. Fed Chair Jerome Powell will hold a press conference 30 minutes later, which might provide information on the central bank’s outlook. On Thursday, the BoC Summary of Deliberations and Canada’s housing data will be released.

USD/CAD

OVERVIEW
Today last price 1.3575
Today Daily Change 0.0008
Today Daily Change % 0.06
Today daily open 1.3567
TRENDS
Daily SMA20 1.3525
Daily SMA50 1.349
Daily SMA100 1.3511
Daily SMA200 1.3483
LEVELS
Previous Daily High 1.3614
Previous Daily Low 1.3532
Previous Weekly High 1.3552
Previous Weekly Low 1.3459
Previous Monthly High 1.3606
Previous Monthly Low 1.3366
Daily Fibonacci 38.2% 1.3582
Daily Fibonacci 61.8% 1.3563
Daily Pivot Point S1 1.3528
Daily Pivot Point S2 1.3489
Daily Pivot Point S3 1.3446
Daily Pivot Point R1 1.361
Daily Pivot Point R2 1.3652
Daily Pivot Point R3 1.3691
On Key

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