USD/CAD loses ground after hot American PPI data

USD/CAD has lost ground due to hot PPI data from the US, which rose to 2.4% YoY in July. Higher oil prices have helped the Canadian dollar trade strong against most rival currencies. The US dollar is trading mildly stronger due to the hot Producer Price Index (PPI) from July figures, which fueled a rise in US treasury yields.

The Canadian dollar also got a boost on the back of rising oil prices. US bond yields have achieved gains across the curve, with the 10-year yield rising to 4.13%, the 2-year yield at 4.87%, and the 5-year yield at 4.25%.

Higher yields can be attributed to investors placing higher bets on a 25 basis point hike in November’s Fed meeting. The stronger case for the September meeting is the Fed not hiking. The University of Michigan’s Sentiment index rose to 71.2, better than expected, while 5-year Consumer Inflation Expectations dropped to 2.9%.

Oil prices resumed their upwards path, and higher energy prices strengthened the Canadian dollar. No relevant data will be released on Friday for the Canadian economy.