CAD Rises Amid Hawkish Expectations from Federal Reserve

The Canadian dollar is rising against its US counterpart ahead of the Bank of Canada's interest rate decision, as investors expect a hawkish stance from the Federal Reserve.

The BoC is widely anticipated to maintain its benchmark interest rate at 2.25% at today's meeting, with inflationary pressures and escalating trade tensions weighing against any easing measures.

Canada's July CPI rose 3% year-over-year, within the central bank's target range of 1-3%, while recent GDP data showed the economy growing faster than forecasted.

The Federal Reserve is increasingly expected to hike interest rates by 25 basis points in September, with a 70% probability following Fed Chair Kevin Warsh's hawkish speech at Jackson Hole.