• USD/CAD remains firm above 1.3550 with US CPI, Presidential debate taking centre stage.
• Investors see the US annual headline CPI declining to 2.6%.
• USD/CAD delivers a mean-reversion move to near 20-day EMA.

The USD/CAD pair holds into gains near 1.3550 in Tuesday’s North American session. The Loonie asset remains firm as the US Dollar (USD) clings to gains amid uncertainty ahead of the United States (US) presidential debate and the Consumer Price Index (CPI) data for August, which will be published on Wednesday.

The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades close to Monday’s high of 101.60.

Investors will keenly focus on presidential debate between current Vice President Kamala Harris and former US President Donald Trump over November elections. Signs of Trump gaining majority over Harris for winning elections could strengthen the US Dollar (USD) as he is known for favoring high fiscal spending and raising tarrifs.

The US annual headline CPI is estimated to have grown by 2.6%, slower than 2.9% in August, with core inflation rising steadily by 3.2%. The inflation data will significantly influence market speculation for Federal Reserve (Fed) interest rate cut path.

Meanwhile, the Canadian Dollar (CAD) remains under pressure as the Bank of Canada (BoC) is expected to cut interest rates further in the last quarter of the year.