The Canadian dollar has been bouncing between the 1.31 and 1.32 range on thin holiday volume trading. With a lack of economic news scheduled for this week and markets in holiday mode, oil prices and geopolitical news related to the conflict in the Middle East have been the primary drivers for the USD/CAD pairing.
The Canadian dollar is holding steady at around a four-and-a-half-month high against the US dollar on Wednesday morning. The Canadian dollar has gained over 5 cents since November and 2.5 cents in the last week against the US dollar.
The Canadian dollar cooled slightly and gave back some of its recent gains against the US Dollar, as well as most major currencies, on Monday. This shift occurred as investors consolidated their positions ahead of the final 2023 Canadian Consumer Price Index (CPI) announcement, expected to be released by Statistics Canada on Tuesday.
On Wednesday, the Federal Reserve held its benchmark federal funds rate steady for the third consecutive time. This effectively put the final nail in the coffin of this historic round of rate hikes, which saw rates go from near zero to the current range of between 5.25% and 5.5%, a 22-year high.
