Perhaps it’s the change in seasons, but there has been a growing sense of cautious optimism in the global equity markets over the past few weeks. Inflation appears to be easing, the US regional banking system has stabilized, and the extensive interest rate hikes by the Federal Reserve in the US and the Bank of Canada are approaching their terminal points or are currently on an extended pause.
Overnight, stronger-than-expected growth data from China has further bolstered positive sentiment, lifting commodity-backed currencies, including the Canadian dollar, while weighing on the safe-haven US dollar. However, despite this and positive Canadian inflation data released earlier today, the Canadian dollar was unable to sustainably make any significant gains, with both the USD and CAD underperforming the G10 currencies on the day.
The Canadian dollar is currently trading at 1.3386 against the US dollar. Unless any unexpected developments arise, we anticipate a quiet week for the CAD/USD exchange rate.
