USD/CAD trades lower at 1.4180 on reduced Fed rate hike expectations
The Canadian Dollar strengthened against the US Dollar as investors reduced expectations for another Federal Reserve rate hike. The US Personal Consumption Expenditures Price Index rose 4.1% year-over-year in May, matching market expectations.
The index increased 0.4% on a monthly basis, below the 0.5% consensus forecast, reinforcing expectations that inflationary pressures may have peaked. The odds of a 25-basis-point increase declined to around 29.9%, from 38.5% a week ago.
However, the Canadian Dollar faces headwinds from falling Oil prices, with West Texas Intermediate trading around $69.50, down 2.62% on the day. The Bank of Canada meeting minutes showed policymakers agreed to keep monetary policy nimble in response to combined risks.
The USD/CAD trades lower around 1.4180, down 0.13% at the time of writing, as the US Dollar weakens following the latest US inflation data.