Loonie Pulls Back as US Dollar Strengthens Ahead of Inflation Data
The Canadian dollar trimmed its gains on Tuesday as the US dollar strengthened ahead of the Consumer Price Index (CPI) release. The USD/CAD pair edged higher during the North American session, reflecting the greenback's broader firmness across major currencies.
The CAD/USD pair had rallied earlier in the week due to rising crude oil prices, but momentum stalled as investors turned cautious before the inflation data. As of Tuesday's close, the loonie was trading near 1.3650 per US dollar, off its strongest level of the week.
A hotter-than-expected reading in the CPI report could reinforce the Fed's higher-for-longer stance on interest rates, boosting the dollar further. Conversely, a cooler print might revive hopes for rate cuts, pressuring the greenback and supporting the Canadian dollar.