US-Iran Deal Hopes Boost US Dollar Amid Hawkish Fed Outlook
The Canadian Dollar declined against the US Dollar amid hawkish comments from Federal Reserve officials and hopes for a US-Iran deal. The USD/CAD pair rose to around 1.4150 during early European trading hours on Friday, fueled by mounting bets on further rate hikes from the Fed.
New York Fed President John Williams and Cleveland Fed President Beth Hammack were scheduled to speak later that day. Philadelphia Fed President Anna Paulson said additional tightening could be needed if the economy continues to evolve as expected, while New York Fed President John Williams suggested tighter monetary policy is coming.
These hawkish remarks followed a quarter-point rate hike by the US central bank last week and have markets pricing in nearly 67.5% probability of an October benchmark rate hike, up from 55.4% a week earlier and 11% a month earlier.