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USD/CAD turns choppy around 1.3600 as investors await US data.
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Fed policymakers believe that higher bond yields could diminish the need for more interest rates.
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Russia’s Novak warned that the deepening war situation in Gaza could affect the oil market.
The USD/CAD pair trades back and forth near the round-level resistance of 1.3600 in the European session. The Loonie asset struggles to find a direction as investors await the Federal Open Market Committee (FOMC) minutes and the producer inflation data for September.
S&P500 futures added some gains in the London session, portraying an upbeat market mood. US equities were broadly bought on Tuesday as Federal Reserve (Fed) policymakers warned of rising Treasury yields and gave neutral guidance on interest rates. Fed policymakers believe that higher bond yields may reduce the need for further interest rate hikes.
The US Dollar Index (DXY) found an intermediate support near 105.60 after a five-day losing streak as focus shifted to the Producer Price Index (PPI) and the FOMC minutes. According to the consensus, US producers raised prices of key goods and services at the factory gate at a steady pace of 0.2%. Headline PPI rose at a slower pace of 0.4% versus a 0.7% increase in August.
On an annualized basis, headline PPI is expected to be stable at 1.6%. Core PPI accelerated to 2.3% against the previous reading of 2.2%.
Meanwhile, oil prices traded within Monday’s range as investors awaited further developments in the Israel-Hamas conflict. Russian Deputy Prime Minister Alexander Novak said on Wednesday that “Russia and Saudi Arabia will discuss the oil market situation and oil prices,” TASS news agency reported. Novak warned that the war situation in Gaza could affect the oil market.
It is worth noting that Canada is the leading exporter of oil to the US and that higher oil prices support the Canadian dollar.
USD/CAD
