USD/CAD down amid higher risk appetite

The USD/CAD pair is down on the day as risk appetite bounces on Wednesday. Meanwhile, Sino-US tensions are eyed by traders and investors who also focus on the hawkish comments by Fed speakers. Frictions after the highest-level US visit by Nancy Pelosi, to Taiwan in 25 years help support the safe-haven status of the US dollar for now, and in turn, weighing on the Canadian dollar

At 1.2850, USD/CAD is down by 0.23%, falling from a high of 1.2891 to a low of 1.2832 so far on the day. The Canadian dollar is correcting Tuesday’s fall that occurred at the start of the week.

Fed officials signaled on Tuesday and Wednesday said the central bank remains “completely united” on increasing rates to a level that will ease inflation, boosting the dollar up to 106.819 over the course of the past few sessions. The market is still quite confident in the Bank of Canada matching the Fed in terms of raising rates.