USD/CAD pares Wednesday’s losses on Fed’s hawkishness

The USD/CAD pair is gaining some 0.82% courtesy of Fed officials on Thursday as Fed’s Mester and Bullard estimate the Federal funds rate to peak around 4.5%.

The Canadian economy Canada grew 0.1% MoM in July, exceeding estimations and the the USD/CAD marches firmly towards the 1.3700 figure after diving close to 0.90% on Wednesday, after hitting a two and half-year high at 1.3833.

Market sentiment turns sour due to continuing Fed’s hawkish rhetoric, while US labour market data confirmed that the economy could survive further central bank tightening. Therefore, at the time of writing, the USD/CAD is trading at 1.3717, above its opening price, after hitting a daily low of 1.3604.

The US Department of Labour reported that unemployment claims reported for the last week ending on September 24 fell 197K, lower than estimates of 215K, a signal of the labor market resilience.

The US Department of Commerce revealed the Q2 final GDP reading, coming at -0.6%, as foreseen. The government revised GDP data from 2016 Q4 to 2021 Q4, which showed that the economy’s recovery from the Covid-19 pandemic was more substantial than initially reported.