In Thursday's early European session, the USD/CAD exchange rate remains stable at 1.3875.
Expectations of a rate decrease by the BoC are growing, which is hurting the Canadian dollar.
Later on Thursday, the focus will be on the US CPI inflation report for August.
During Thursday's early European session, the USD/CAD pair continues to rise, closing close on 1.3875. The Canadian dollar (CAD) is depreciating versus the US dollar due to growing wagers that the Bank of Canada (BoC) would resume its easing cycle. When the US Consumer Price Index (CPI) for August is released later on Thursday, all eyes will be on it.
In stark contrast to market predictions for a slight increase in employment, the Canadian economy lost 66,000 jobs in August. During the same time frame, the nation's unemployment rate rises to 7.1%, which strengthens the likelihood of a rate cut by the BoC and puts pressure on the lonie.
The majority of economists predict that the Canadian central bank will reduce its benchmark interest rate by 25 basis points (bps) during its September policy meeting. According to a recent Reuters survey, the majority of economists think the BoC will continue to implement monetary easing in 2025 after a rate decrease in September.
"The market is preparing for a rate decrease by the Bank of Canada," stated Amo Sahota, a director at San Francisco's Klarity FX. Sahota continued, "That is weighing on the loonie just a little bit, but not by enough amount to have us really going along."
Later in the day, the Bureau of Labor Statistics will release its CPI inflation report, which is predicted to show a 2.9% YoY increase in August compared to a 2.7% increase in July. August is expected to see a 3.1% YoY increase in the core CPI, which is the same rate as July and tied for the highest since February. In the short term, this might push the USD down if US inflation unexpectedly softens.
Expectations of a rate decrease by the BoC are growing, which is hurting the Canadian dollar.
Later on Thursday, the focus will be on the US CPI inflation report for August.
During Thursday's early European session, the USD/CAD pair continues to rise, closing close on 1.3875. The Canadian dollar (CAD) is depreciating versus the US dollar due to growing wagers that the Bank of Canada (BoC) would resume its easing cycle. When the US Consumer Price Index (CPI) for August is released later on Thursday, all eyes will be on it.
In stark contrast to market predictions for a slight increase in employment, the Canadian economy lost 66,000 jobs in August. During the same time frame, the nation's unemployment rate rises to 7.1%, which strengthens the likelihood of a rate cut by the BoC and puts pressure on the lonie.
The majority of economists predict that the Canadian central bank will reduce its benchmark interest rate by 25 basis points (bps) during its September policy meeting. According to a recent Reuters survey, the majority of economists think the BoC will continue to implement monetary easing in 2025 after a rate decrease in September.
"The market is preparing for a rate decrease by the Bank of Canada," stated Amo Sahota, a director at San Francisco's Klarity FX. Sahota continued, "That is weighing on the loonie just a little bit, but not by enough amount to have us really going along."
Later in the day, the Bureau of Labor Statistics will release its CPI inflation report, which is predicted to show a 2.9% YoY increase in August compared to a 2.7% increase in July. August is expected to see a 3.1% YoY increase in the core CPI, which is the same rate as July and tied for the highest since February. In the short term, this might push the USD down if US inflation unexpectedly softens.
