US Dollar Surges Against CAD as Fed Rate Hike Odds Increase

The US Dollar has strengthened against several major currencies, including the Canadian Dollar (CAD), in the European trading session on Tuesday. The USD/CAD price is up 0.12% at around 1.4190, with financial markets increasingly confident that the Federal Reserve will deliver two more interest rate hikes this year.

The CME FedWatch tool shows a 60% probability of the Fed delivering a quarter-to-a-percent interest rate hike in both policy meetings remaining this year. This has boosted the US Dollar Index (DXY), which gauges the Greenback's value against six major currencies, to near 101.35.

Investors are also looking forward to the release of Canadian monthly Gross Domestic Product (GDP) data for July and the United States JOLTS Job Openings data for August. The consensus is that the Canadian economy will have remained flat after expanding 0.3% in June, while the US employers posted 7.23 million fresh jobs, marginally lower than 7.271 million in July.