USD/CAD Edges Higher Amid Fed Rate Hike Expectations

The USD/CAD currency pair is edging higher above 1.3850, but a bearish bias persists in the market.

This comes as traders anticipate a rate hike from the Federal Reserve on Wednesday, following data that showed US Consumer Price Index (CPI) inflation accelerated in August.

The headline CPI rose 0.4% MoM in August, with a 12-month increase of 3.4%, according to the Bureau of Labor Statistics. Core CPI inflation increased to 0.3% MoM in August from 0.2% in July, above the 0.2% forecast.

Markets are now pricing in nearly 86% odds of an interest rate hike this week and another move higher later in the year, according to the CME FedWatch tool.