USD/CAD holds steady near mid-1.3200s post-Canadian CPI, focus remains on FOMC
- A follow-through pullback in Oil prices continued to undermine Loonie.
- Softer Canadian inflation figures for August extended additional support.
- The key focus remains firmly on the highly anticipated FOMC policy decision.
The USD/CAD pair surrendered early modest gains to an intraday high level of 1.3272 and refreshed session lows in the last hour, albeit quickly recovered few pips post-Canadian CPI.
The pair continued with its struggle to build on the intraday attempted bullish moves and once again met with some fresh supply at higher levels, despite a modest pickup in the US Dollar demand. Even a weaker tone surrounding Crude Oil prices, which tend to undermine demand for the commodity-linked currency - Loonie, also did little to provide any meaningful impetus.
Softer Canadian CPI extended some support
The pair touched daily lows during the early Nort-American session but managed to find some support following the release of softer Canadian consumer inflation figures. In fact, the headline CPI and the BoC's core CPI fell by 0.1% during the reported month and unexpectedly eased to 1.9%, which eventually exerted some pressure on the Canadian Dollar and helped limit the intraday downtick.
It will now be interesting to see if the pair is able to regain some positive traction or continues with its intraday pullback as investors start repositioning for Wednesday's key event risk - the highly anticipated FOMC monetary policy decision - scheduled to be announced later during the US trading session.
Technical levels to watch