USD/CAD retreats to 1.4110 as the Canadian Dollar strengthens, even as falling oil prices and a 78% probability of a December Fed rate hike provide a floor for the US Dollar.
Crude prices dropped after President Trump said further military strikes on Iran are 'highly unlikely' if progress continues on Iran's nuclear program and the Strait of Hormuz remains open, easing the geopolitical risk premium that had pushed up energy costs.
The pair has slipped to around 1.4110 as the CAD firms despite falling oil prices. However, December Fed rate-hike odds above 78% after October NFP of 165,000 (vs 65,000 expected) and unemployment at 4.1% could restore USD strength, leaving the direction balanced ahead of Tuesday's CPI and Friday's PPI.
The USD/CAD pair trades at 1.4110 as the Canadian Dollar gains ground, though downside momentum remains limited by strong US labor data. With October Nonfarm Payrolls printing at 165,000 and the unemployment rate at 4.1%, markets have priced in a greater than 78% probability of a December Fed rate hike. Investors are now shifting focus to upcoming US CPI and PPI reports for further policy direction.
Crude dropped after President Trump stated that further military strikes on Iran are 'highly unlikely,' provided progress continues on Iran's nuclear program and the Strait of Hormuz remains open.
Iran has warned it will retaliate against any future strikes by targeting US and Israeli assets, and renewed military action would likely push energy costs higher again.
The pair traded around 1.4110 as the Canadian Dollar gained ground, but the article notes downside momentum could be restrained because strong US jobs data lifted odds of a December Fed rate hike above 78%.
The US CPI report on Tuesday and the PPI on Friday, plus support at the 50-day EMA at 1.4054 and the nine-day EMA at 1.4047, where a daily close below would undermine the bullish bias.