USD/CAD Plunges on Fed Hike Expectations and Strong Dollar

The Canadian dollar has faced significant pressure in recent trading sessions, with USD/CAD recording four consecutive bullish sessions. This streak has resulted in a gain of over 1% for the US dollar, highlighting a strong short-term buying bias in the market.

One factor contributing to the US dollar's strength is growing speculation that the Federal Reserve may adopt a more aggressive stance in the near term. As long as these expectations continue, demand for US dollars is likely to remain high.

The Fed's decision on interest rates will be a key factor in determining the trajectory of USD/CAD. A September hike is now seen as increasingly likely, which could further bolster the US dollar and put additional pressure on the Canadian currency.