CAD Treads Water Amid Risk Aversion and Ongoing Global Uncertainty

The Canadian dollar traded sideways due to risk aversion ahead of the Federal Reserve's decision on interest rates and ongoing tensions in the Middle East. The US dollar saw a risk-aversion bid, and the odds for a Fed rate hike were at 92%. The Canadian dollar's lackluster performance was not helped by Canadian inflation data, which showed headline CPI remaining unchanged at 3.0% from July.

Mark Carney, in his Canada Investment Summit address, announced new tax strategies and incentives to attract investment, targeting $1 trillion in new investment. He also expressed a desire to restart trade discussions with the US while continuing to diversify Canada's trade relationships. The recent military escalation in the Middle East added to concerns over regional oil supplies.

Other major currencies were affected by risk aversion and Fed rate hike expectations, with EURUSD, GBPUSD, and USDJPY experiencing losses due to broad-based dollar demand combined with climbing oil prices and jitters over a Fed rate decision.