USD/CAD Climbs Ahead of US PPI Data Release Amid Inflation Concerns
The USD/CAD pair is trading around 1.3820 on Thursday, up 0.11% from the day's start.
This increase comes as investors wait for the US Producer Price Index (PPI) data release at 12:30 GMT. The PPI is expected to accelerate to 5.3% year-over-year in August, with the core index rising to 4.6%. A stronger-than-expected reading could lead to concerns about persistent inflationary pressures and increase expectations of a rate hike by the Federal Reserve.
The US Dollar also benefits from geopolitical tensions between the United States and Iran, as well as elevated US Treasury yields. However, the Canadian Dollar's strength due to higher oil prices continues to cap USD/CAD gains.
Scotiabank analysts note that the CAD has shown resilience in the face of US trade measures, which have had little impact on the currency so far. They predict moderate USD gains will draw selling interest and expect support at 1.3715/35 ahead of a decline to 1.3500/50.