Canadian Dollar Struggles Amidst Fed Expectations and Ongoing Trade Tensions

The Canadian dollar's momentum is weakening as buying pressure around USD/CAD continues to gain traction.

This trend is supported by two key factors: expectations of a more aggressive Federal Reserve and an ongoing trade dispute that shows few signs of resolution.

Since last week, the probability of another 0.25% interest rate increase at the October 28 meeting has surpassed 50%, according to CME Group's tracker.

The situation is different for the Bank of Canada, with market expectations remaining split between a rate hike and an unchanged decision.