CANADIAN DOLLAR NUDGED HIGHER AS USD SOFTENS IN CALM MONDAY SESSION

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  • Canadian Dollar picks up with the USD losing ground in a risk-on session.
  • Investors are looking for the sidelines ahead of Wednesday’s US CPI and BoC rate decision.
  • USD/CAD keeps its positive trend intact with CAD recovery attempts limited.

The Canadian Dollar (CAD) is trading moderately higher on Monday, extending the rebound from the year-to-date lows after Friday’s upbeat Ivey PMI offset the negative impact of upbeat US Nonfarm Payrolls. A modest appetite for risk on a very calm weekly opening is allowing some US Dollar pullback, ahead of key macroeconomic data this week.

The US economy created far more jobs than expected in March, while wage growth moderated, although it is still at levels inconsistent with the Federal Reserve’s (Fed) 2% core inflation target for price stability. Last week, Fed officials hinted at a hawkish demeanor on the back of the recent data, which is expected to keep the US Dollar’s downside attempts limited.

Investors, however, are looking for the sidelines on Monday, awaiting the US CPI figures on Wednesday to check whether the recent uptick on inflation is an exception or a structural trend. Also on Wednesday, the Bank of Canada (B0C) will release its monetary policy decision. There is a minor risk of an unexpected rate cut that would send the CAD tumbling.


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