The Canadian Dollar (CAD) is trading tightly on Wednesday, with little movement against the US Dollar (USD) as US markets are closed for the mid-week Juneteenth holiday. Canada has mid-tier data releases scheduled for the rest of the week, with investors eagerly awaiting Friday’s US Purchasing Managers Index (PMI) print. The Bank of Canada (BoC) Summary of Deliberations didn’t reveal any new information but highlighted the widening policy divergence between Canada and the US.
The CAD has seen slight gains against the USD this week, with the BoC reiterating its policy stance in its Summary of Deliberations. Despite concerns about possible inflation in Canada, investors remain optimistic, and risk appetite is holding steady. The Fed officials have expressed caution this week, but markets are still hopeful for a September rate cut, with traders pricing in a 70% chance of a quarter-point cut at the September 18 meeting. Thursday will bring an update on US Initial Jobless Claims before Friday’s PMI print.
The Canadian Dollar has shown strength against major currencies, with the CAD performing best against the New Zealand Dollar. The CAD remains stable against the USD, EUR, GBP, and other major currencies. The technical analysis shows that the USD/CAD pair is trading flat, with the CAD holding steady near the 1.3700 handle. The pair is hovering around the 200-hour Exponential Moving Average (EMA), signaling a lack of near-term momentum but still showing a positive trend against the US Dollar.
Overall, the Canadian Dollar is treading water on a quiet trading day, with little movement expected until the end of the week. Investors are closely watching for the US PMI print on Friday and monitoring the US Initial Jobless Claims data on Thursday. Despite concerns about inflation and cautious statements from Fed officials, markets remain optimistic about a possible rate cut in September. The USD/CAD pair is holding steady, indicating a positive trend for the Canadian Dollar against the US Dollar. As markets await key data releases, the CAD is expected to continue its slow grind against major currencies.
