USD/CAD rallies ahead of FOMC’s decision

The USD/CAD pair is advancing, bolstered by high US T-bond yields and the dollar’s performance. Canada’s CPI rose below forecasts but is still above the 7% threshold.

US housing data was mixed, though higher mortgage rates would likely continue to deteriorate the housing market.

The USD/CAD also rises to fresh two-year highs, above 1.3300, cancelling a previous triple-top chart pattern, courtesy of a buoyant US dollar, alongside falling crude oil prices that impact the Canadian counterpart and constituting a tailwind for the USD/CAD.

The USD/CAD is sharply climbing after hitting a daily low at around 1.3226, also spurred by the advancement of Treasury yields, led by the 10-year benchmark note sitting at 3.563%, on expectations that the Fed would raise rates by at least 75 bps. At the time of writing, the USD/CAD is trading at 1.3365, above its opening price by 0.83%.

Earlier, during the US session, Statistics Canada reported that inflation in the country remains higher but eased a tone, registering figures below estimations. The Consumer Price index (CPI) in August rose 7% YoY, less than estimates of 7.3% and below 7.6% of July’s figure.