Canadian Dollar Consolidates Amid Middle East Tensions
The Canadian dollar is in consolidation mode after strong employment data from Canada and disappointing US payrolls. This has reduced expectations of a September Fed rate hike, making it easier for traders to sell USD/CAD.
The narrowing CAD/US interest rate spread is another reason for traders to sell the pair. Meanwhile, WTI fell from 84.34 to 82.15 before recovering to 83.11, supported by reports of shipping attacks in the Red Sea and US forces firing on container vessels bound for Iran.
The FX markets opened in a mild risk-off mood as the US dollar index edged higher due to renewed hostilities in the Middle East. Traders are cautious ahead of today's US inflation release, with core CPI forecast to climb 0.2% month over month and annual pace easing to 2.5%.