USD/CAD trades sideways at 1.4120 as investors look to US CPI figures for direction, balancing Fed rate hike expectations against Canada's recent labor market cooling.
The pair is stuck near 1.4120 as traders hold fire ahead of the US CPI report later on Tuesday, with headline seen at 0.3% MoM and core at 0.2%. The Fed's supportive rate backdrop (84% December hike odds) and widening US-Canada yield spreads lean USD-positive, but weak Canadian jobs data (6.7% unemployment) is already priced in. Direction hinges on the CPI surprise, so the pre-data stance is neutral.
The USD/CAD pair remains flat near 1.4120 as traders await US inflation data due later Tuesday. Markets are pricing in an 84.0% probability of a Federal Reserve rate hike in December, while Canadian economic data remains weak following a rise in the unemployment rate to 6.7% in October.
Traders are waiting on the sidelines for the US CPI inflation report due later on Tuesday, which is expected to show headline inflation rising 0.3% month-over-month and core at 0.2%.
Support sits in the 1.4060–1.4045 area with deeper support near 1.3910, while resistance is at the upper Bollinger Band around 1.4205; a break above that would signal continuation of the broader upmove.