USD/CAD Retreats as Stronger Oil Prices Offset US Inflation Pressures

The US dollar's recent gains against the Canadian dollar are losing steam as oil prices continue to rise, offsetting pressure from renewed producer-price inflation in the United States. The USD/CAD pair reached an intraday high of 1.3835 before retreating to around 1.3815.

The US Producer Price Index (PPI) inflation accelerated in August, rising 0.4% month-on-month and exceeding expectations of a 0.3% increase. However, core PPI was softer than anticipated, increasing only 0.2% monthly.

Despite the latest inflation figures keeping rate-hike bets alive, markets are now focused on Friday's US Consumer Price Index report for stronger confirmation of the Federal Reserve's next policy move.