USD/CAD Pauses Ahead of PPI and CPI Reports
The US dollar (USD) has maintained its upward momentum against the Canadian dollar (CAD), but at a slower pace, ahead of key inflation data releases. The USD/CAD pair is currently trading just above the 1.3800 mark, with traders waiting for the release of the US Producer Price Index (PPI) report on Thursday and the Consumer Price Index (CPI) on Friday.
The PPI and CPI reports will provide crucial insights into inflation levels, which in turn will influence the Federal Reserve's policy path and drive demand for the USD. With a greater chance of a rate hike at the Fed's meeting on September 15-16, investors are pricing in a more hawkish stance from the central bank.
The recent escalation of US-Iran tensions has also contributed to the upward trend in oil prices, benefiting the safe-haven Greenback. Meanwhile, US bond yields have remained supported due to investor disappointment over the US Treasury's decision to buy back up to $6 billion in 10-year to 20-year maturities.