USD/CAD on the Rise Again Following BoC Governor’s Speech

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The USD/CAD pair restarted a bullish climb on Thursday, as the US Federal Reserve maintains its focus on slashing inflation rates and ignoring the possibility of triggering a recession, as expectations for a Fed pivot declined, which was evident in losses recorded by US equities.

At press time, the USD/CAD pair trades near a three-day top at 1.3733 or up by 0.86%. This comes as the Bank of Canada’s Governor Tiff Macklem noted in a press statement a few hours ago that while the Canadian economy was showing signs of slowing down, the labor market remained strong, though demand was overshadowing supply. The BoC governor explained that the bank is looking out for signs of a slowdown in inflation.

USD/CAD 4-Hour Chart

The BoC chief also acknowledged that “there is more to be done,” which could open the doors to additional rate hikes in its coming meetings. The Bank of Canada is scheduled to have its next interest rate decision on October 26.

USD/CAD at Three-Day High Ahead of NFP Data

The USD/CAD pair initially recorded a negative reaction to the BoC chair’s remarks, dropping below the 1.3700 mark but quickly regained control of market bias and printed new daily highs at 1.3744. Earlier today, Canada’s Ivey PMI index for last month increased by 55.9, unadjusted, while the seasonally adjusted figures came in at 59.5.

Meanwhile, even as the labor market flashed signs that it was beginning to feel the US Fed’s monetary policy, traders remain on the sidelines ahead of Friday’s Nonfarm Payrolls (NFPs) data.

Earlier today, the Minnesota Fed President Neil Kashkari noted that the Fed is “quite a ways away from pausing rates,” adding that the institution has “more work to do” to slash inflation to the 2% target. Meanwhile, Atlanta Fed Chair Bolstic and San Fransisco Fed Chair Daly have reiterated the need to increase rates higher and for longer.

 

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Azeez Mustapha

Azeez Mustapha is a trading professional, currency analyst, signals strategist, and funds manager with over ten years of experience within the financial field. As a blogger and finance author, he helps investors understand complex financial concepts, improve their investing skills, and learn how to manage their money.