❗️Quiet Holiday Week for USD/CAD❗️
The USD/CAD pair records its third consecutive weekly decline, driven by a weaker US Dollar and lower US Treasury bond yields. Trading at 1.3204, the pair faces a quiet week due to holiday mode. The US Richmond Fed Manufacturing Index fell to 11 in December, contributing to the USD's lowest level since July, around 100.80. The decline in November's Core PCE triggers expectations of early 2024 rate cuts by the Federal Reserve, with markets pricing in over 88% chance of a rate cut starting in March 2024.
The Loonie gains strength from rising oil prices, acting as a headwind for USD/CAD. Despite the Bank of Canada not ruling out an additional rate hike, market anticipation of decreased odds for another hike prevails. Investors widely expect the BoC's next move to be a rate cut in the coming year.
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