USD/CAD strengthens above 1.3900 as traders await US CPI data
USD/CAD edges higher to around 1.3925 in Tuesday’s early Asian session.
Traders brace for the US CPI inflation data, which is due on Wednesday.
The concerns about possible tariffs by the Trump administration weigh on the Canadian Dollar.
The USD/CAD pair gains traction to near 1.3925 during the early Asian session on Tuesday, bolstered by the firmer US Dollar (USD) amid the strong return of the "Trump trade.” The Canadian September Building Permits are due later on Tuesday. The US October Consumer Price Index (CPI) inflation data will take center stage on Wednesday.
The US Dollar Index (DXY), a measure of the USD's value relative to a basket of foreign currencies, jumps to fresh four-month peaks around 105.70. The Greenback strengthens against the Canadian Dollar (CAD) after US election results showed Trump's victory. Analysts expect the US president-elect Donald Trump could put upward pressure on inflation and bond yields while proceeding to cut rates at a slower and smaller pace, supporting the USD.
However, traders will take more cues from the US inflation data this week for clarity about future US policy. The headline CPI is estimated to show an increase of 2.6% YoY in October, while the core CPI is projected to show a rise of 3.3% during the same period.
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