Traders reduce bets on Federal Reserve tightening ahead of key Canadian inflation data later this week.
The USD/CAD pair declined to 1.3860 in early European trading Monday, extending losses as the US Dollar weakens against the Canadian Dollar. Markets are scaling back expectations for further Federal Reserve rate hikes, pressuring the greenback.
The move follows a broader shift in sentiment after recent US economic data suggested cooling inflation, reducing the likelihood of aggressive Fed action. Canadian inflation figures due later this week could further influence the Bank of Canada’s policy outlook.
No immediate market reaction was reported beyond the currency pair’s movement.