The USD/CAD currency pair retreated from an eight-month peak of 1.3849 reached in the previous session, trading around 1.3820 during Monday’s Asian trading hours. This pullback is attributed to the strengthening Canadian Dollar (CAD), which has been buoyed by rising oil prices.
West Texas Intermediate (WTI) crude oil is currently priced at approximately $76.80 per barrel. This increase is fueled by geopolitical tensions in the Middle East, following a rocket attack in the Israeli-occupied Golan Heights. Israel and the United States have blamed the Lebanese militant group Hezbollah for the strike, as reported by Reuters.
In response to the attack, which resulted in the deaths of 12 teenagers and children, Israel’s security cabinet has granted Prime Minister Benjamin Netanyahu’s government the authority to decide on the appropriate response.
On the other hand, the US Dollar (USD) is under pressure due to a deceleration in inflation and a softening labor market in the United States. These factors have raised expectations of three rate cuts by the Federal Reserve this year, starting in September.
These expectations were reinforced by the US Personal Consumption Expenditures (PCE) Price Index data released on Friday. The index showed a modest inflation rise in June, indicating easing price pressures. The PCE Price Index increased by 2.5% year-over-year in June, down from 2.6% in May, aligning with market forecasts. On a monthly basis, the index rose by 0.1%, following no change in May.
The Core PCE Price Index, which excludes food and energy prices, also rose to 2.6% in June, maintaining the increase seen in May and exceeding the forecast of 2.5%. Month-over-month, the Core PCE Index grew by 0.2% in June, compared to 0.1% in May.
Related Topics:
