CAD Holds Steady as Markets Eye PPI Data and Fed Rate Hopes
The Canadian Dollar (CAD) is trading sideways against the US Dollar (USD) at around 1.3810 during Thursday's European session, awaiting the release of US Producer Price Index (PPI) data for August.
Investors are closely watching the PPI data, which is expected to show a year-over-year acceleration in headline inflation to 5.3% from July's 4.7%, and core PPI rising to 4.6% from 4.2%. A strong reading could lead to increased expectations of interest rate hikes by the Federal Reserve (Fed) in the near term.
The CME FedWatch tool shows a 61.2% probability of the Fed hiking interest rates at its next policy meeting, scheduled for next week. Additionally, investors will be keeping an eye on the upcoming US Consumer Price Index (CPI) data release on Friday.