USD/CAD ticks lower to near 1.4420 as BoC unlikely to continue reducing rates by 50 bps
The post USD/CAD ticks lower to near 1.4420 as BoC unlikely to continue reducing rates by 50 bps appeared on BitcoinEthereumNews.com.
USD/CAD trades subduedly as the Canadian Dollar outperforms on upbeat domestic employment data for December. The US Dollar remains firm as traders pare Fed dovish bets after upbeat US NFP data. Investors await the US inflation data for December for more interest rate guidance. The USD/CAD pair edges lower to near 1.440 in Monday’s North American session. The Loonie pair ticks lower as the Canadian Dollar (CAD) exhibits strength after Canada’s surprisingly upbeat labor market data weighed on market expectations for the Bank of Canada (BoC) to continue reducing interest rates at a larger-than-usual pace of 50 basis points (bps). The Canadian employment report showed a robust addition of laborforce alongwith a sharp decline in the jobless rate. However, a one-time good employment report appears to be insufficient to allow the BoC to pause its policy-easing cycle. The Loonie pair falls marginally even though the US Dollar (USD) extends its winning streak for the fifth trading session on Monday and posts a fresh over two-year high, with the US Dollar Index (DXY) rising above 110.00. The Greenback performs strongly as traders expect that the Federal Reserve’s (Fed) current interest rate cut cycle has paused for now. According to the CME FedWatch tool, the central bank is expected to keep interest rates in the current range of 4.25%-4.50% in the January, March, and May policy meetings. Meanwhile, traders are divided for the policy meeting in June. Market participants have pared Fed dovish bets on the back of upbeat United States (US) Nonfarm Payrolls (NFP) data for December. The data showed that labor demand was surprisingly stronger than November’s reading. The Unemployment rate came in lower at 4.1% than estimates and the former release of 4.2%. Investors should brace for more volatility in market expectations for the Fed’s monetary policy outlook as…
Filed under: News - @ January 13, 2025 1:31 pm