USD/CAD continues to attract buyers and draw support from a combination of factors.
Bets for a larger BoC rate cut, along with bearish Crude Oil prices, undermine the Loonie.
Expectations for a less aggressive Fed easing lend support to the Greenback and the pair.
The USD/CAD pair trades near its highest level since August 5, around the 1.3920-1.3925 region during the Asian session on Wednesday and seems poised to prolong its recent upward trajectory witnessed over the past month or so. A combination of factors might continue to weigh on the Canadian Dollar (CAD), which, along with the emergence of some US Dollar (USD) dip-buying, validate the near-term positive outlook for the currency pair.
The Bank of Canada (BoC) Governor Tiff Macklem sounded dovish last Friday and said that the headline GDP will be lower if population growth slows faster than assumed. Furthermore, Macklem, speaking to the House of Commons finance committee on Tuesday, reiterated that the central bank would be able to cut rates further if the economy evolved broadly in line with forecasts. Adding to this, the recent slump in Crude Oil prices, triggered by concerns about flagging global demand growth, is seen undermining the commodity-linked Loonie and acting as a tailwind for the USD/CAD pair.
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