The Canadian Dollar (CAD) advanced against the US Dollar (USD) on Tuesday, fueled by disappointing US ISM Services PMI and Factory Orders data, which reinforce expectations of Fed rate cuts. While CAD performance was mixed against other major currencies, it remained near opening levels versus the USD and NZD.
Wednesday’s Bank of Canada (BoC) meeting is unlikely to significantly impact the CAD, with another rate hold widely anticipated. Market focus remains on US ADP Employment Change data and Fed Chair Jerome Powell’s testimony before Congress, where he will discuss the Fed’s Semi-Annual Monetary Policy Report.
Technically, USD/CAD retreated from the 1.3600 handle, settling back into familiar congestion near 1.3580. Despite upward pressure, daily candlesticks remain within a tight range. Continued support above the 200-day Simple Moving Average (SMA) at 1.3477 signals potential further gains for CAD.