USD/CAD juggles below 1.3000 ahead of US Inflation, oil advances
- USD/CAD is oscillating below 1.3000 as investors await US Inflation data.
- The US inflation rate is responding inversely to the spree of Fed rate hikes.
- Oil prices have rebounded firmly as the European economy will consume more oil to cater winter demand.
The USD/CAD pair is witnessing topsy-turvy moves as investors are awaiting the release of the US inflation data. The pair has turned sideways around 1.2958 after a rebound from 1.2964 on Monday. The asset displayed a rebound move after a downside momentum loss and is expected to recapture the psychological hurdle of 1.3000.
After a decline in gasoline prices in the US and a spree of rate hikes by the Federal Reserve (Fed), the consensus for the price rise index has dropped sharply. Investors are expecting the headline Consumer Price Index (CPI) to release at 8.1% vs. 8.5% reported for July. There is no denying the fact that the inflation rate is negatively responding to higher interest rates and headwinds for the households are scaling down.
No wonder, a decline in inflationary pressures will compel the Fed to scale down the pace of hiking interest rates and shift to normalcy to keep up the growth prospects in the economy.
On the loonie front, the Canadian dollar has weakened broadly after the release of downbeat employment data. The jobless rate increased firmly to 5.4% against the expectation of 5%. Also, the Canadian administration reported an increase in lay-off numbers by 39.7k. The vulnerable Canadian employment data has put a serious in loonie for a prolonged period.
Meanwhile, oil prices are advancing sharply from the past three trading sessions after dropping to near $81.00. The black gold has gained firmly as a production cut announcement by the OPEC cartel will kick-start sooner. Apart from that, the European economy will be forced to shift to oil to cater to the heated demand for the winter season as energy prices have reached to the rooftop.