Ella 
USD/CAD is higher for a second session, hovering around 1.3750 during Wednesday’s Asian trading session. The rise in USD/CAD was attributed to a stronger U.S. dollar (USD), which was boosted by hawkish sentiment from the Federal Reserve (FED) and expectations of continued interest rate hikes. Additionally, comments from Minneapolis Fed President Neel Kashkari on Tuesday hinted at the possibility of a rate hike, boosting the dollar.
According to Reuters, Chairman Kashkari said the most likely scenario is that interest rates remain unchanged for an extended period. Although interest rate hikes are not the main expectation, the possibility is not completely ruled out.
Meanwhile, the Canadian dollar (CAD) weakened against the U.S. dollar as the latter’s strength impacted crude oil prices, and thus USD/CAD. This correlation is significant since Canada is the largest oil exporter to the United States.
West Texas Intermediate (WTI) crude oil prices extended losses for a second straight day, trading around $77.80 a barrel at press time. Oil traders will turn their focus to changes in U.S. crude inventories due later on Wednesday. The U.S. Energy Information Administration (EIA) is expected to report weekly changes in barrels of crude oil and derivatives inventories.
Additionally, the Canadian dollar failed to find support despite Canada’s Ivey Purchasing Managers’ Index (PMI) coming in above expectations. Canada’s seasonally adjusted Ivey Purchasing Managers’ Index climbed to 63.0 in April from 57.5, beating expectations of 58.1. It was the ninth consecutive month of growth and reached the highest level in two years.
