Canadian Dollar Strengthens as US Inflation Data Disappoints Fed Rate Hike Bets

The Canadian Dollar (CAD) gained strength against its US counterpart on Wednesday, following the release of US inflation data that came in below expectations.

The Personal Consumption Expenditures (PCE) Price Index showed annual PCE inflation remained unchanged at 3.4% in August, below the 3.7% forecast by markets.

This led to a reduction in bets on an October rate hike by the Federal Reserve (Fed), with market expectations now assigning around a 37% chance to a rate increase in October, down from nearly 51% on Tuesday and 71% a week earlier.