USD/CAD Rangebound Ahead of Powell's Jackson Hole Speech

The USD/CAD pair traded in a narrow range on August 28, hovering around 1.3850 during the European session. This stability was due to traders being cautious ahead of Federal Reserve Chair Powell's speech at Jackson Hole.

The core PCE data released on Wednesday met expectations, pushing the probability of a September rate hike from 36% to 40%. Bank of America's head of strategy noted that if Powell implies readiness to raise rates further if inflation doesn't cool down, it would be seen as hawkish and support the U.S. dollar.

Escalating trade disputes between the U.S. and Canada are weighing on the Canadian dollar. Canada has added copper wire and charcoal to its retaliation list, which could dampen export prospects in resource- and manufacturing-related sectors.