USD/CAD trades sideways above 1.3550, with investors focusing on BoC’s Macklem speech and the US CPI data for August.
BoC Macklem is expected to deliver a dovish interest rate guidance.
The risk profile is cautious ahead of the US inflation data.
The USD/CAD pair stays in a tight range above 1.3550 in Tuesday’s European session. The Loonie asset struggles for direction as investors have sidelined ahead of the Bank of Canada (BoC) Governor Tiff Macklem’s speech, which is scheduled at 12:25 GMT.
Tiff Macklem is expected to provide guidance about the likely monetary policy action in the last quarter of the year. The interest rate guidance from BoC Macklem is expected to be dovish as the Canadian economy is going through a rough phase due to subdued demand environment. Canadian Unemployment Rate rose at a faster-than-expected pace to 6.6% in August from the estimates of 6.5% and the July’s release of 6.4%.
The BoC has already reduced interest rates by 75 basis points (bps) to 4.25% since June. Financial market participants expect the BoC to cut its borrowing rates further to boost the economic growth.
Meanwhile, the overall market mood is quite cautious as investors await the United States (US) Consumer Price Index (CPI) data for August, which will be published on Wednesday. S&P 500 futures have posted decent losses in the European session. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, holds onto gains near 101.60.
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