CAD Flat After Fed Officials Differ on Hike Timing
The Canadian Dollar's (CAD) value against the US dollar was unchanged on Tuesday despite two key economic releases from Canada. The first release showed a flat July for the country's economy, exactly as forecasted, with growth in construction and utilities offsetting declines led by a drop in manufacturing.
New York Fed President Williams said that there is no rush to hike interest rates again, which contributed to a dip in USD/CAD. However, when Federal Reserve Governor Barr spoke, the pair made its second run at the session high after he mentioned that high energy prices and artificial intelligence investment mean more hikes are likely needed.
Fed officials differ on the timing of future rate hikes, with President Williams saying one more hike may be appropriate late this year. This difference in opinion is reflected in Fed funds futures, which still price about a 70% chance of an October hike. The Bank of Canada's (BoC) next decision will be on October 28, and if they decide to raise rates, it would put pressure on the Canadian Dollar.