The USD/CAD pair appreciated to around 1.3920 during Thursday’s European session, approaching its three-month high of 1.3940 reached in the previous session. This upward movement is attributed to a robust US Dollar (USD) amid ongoing market caution related to the upcoming US presidential election.
Traders are closely monitoring key US data releases, including the PCE inflation figures on Thursday and the Nonfarm Payrolls (NFP) report on Friday. On Wednesday, the Greenback faced some headwinds as the US Gross Domestic Product (GDP) for the third quarter (Q3) grew at an annualized rate of 2.8%, below the 3.0% growth recorded in the second quarter and market forecasts.
Conversely, the ADP Employment Change report indicated that private sector employers added 233,000 jobs in October, marking the largest increase since July 2023. This figure followed an upward revision of September’s numbers to 159,000 and significantly surpassed forecasts of 115,000.
The commodity-linked Canadian Dollar (CAD) has received some support from rising oil prices, given Canada’s position as the largest crude supplier to the United States. Optimism surrounding US fuel demand, following an unexpected decline in crude inventories, has bolstered crude prices. At the time of writing, West Texas Intermediate (WTI) oil is trading around $68.70.
The US Energy Information Administration (EIA) reported a decline in crude oil stockpiles by 0.515 million barrels for the week ending October 25, contrary to market expectations of a 2.3 million-barrel increase.
Additionally, Bank of Canada Governor Tiff Macklem addressed the House of Commons Finance Committee on Wednesday regarding the bank’s monetary policy. He stated that if the economy aligns with their forecasts, further policy rate cuts may be anticipated to support demand and maintain inflation targets.
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