Ella 
USD/CAD pared intraday losses during Wednesday’s Asian session, hovering around the psychological 1.3700 mark. USD/CAD fell despite downbeat Canadian inflation data released on Tuesday, which was enough to keep the Bank of Canada on hold.
The consumer price index fell to an annual rate of 3.1% in October, down from 3.8% in September. This figure was 3.2% lower than the expected value. Inflation came in at 0.1% monthly, in line with expectations. In addition, core inflation was 0.3% monthly, but the annual core inflation rate fell to 2.7% from 2.8%.
According to a Statistics Canada press release, “the decline in the annual rate of inflation was mainly due to a decrease in gasoline prices in October (-7.8%).” “Excluding gasoline, core inflation rose 3.6% in October, while core inflation rose 3.7% in September.”
The Canadian dollar (CAD) may face downward pressure due to lower crude oil prices. West Texas Intermediate (WTI) crude ended a three-day winning streak, with prices trading lower at around $77.70 a barrel at press time. Crude oil prices fell modestly as U.S. crude inventories likely increased significantly.
API weekly crude inventories rose to 9.047 million barrels in the week ended Nov. 17 from 1.335 million barrels the previous week. A rise in U.S. crude stockpiles offset plans by the Organization of the Petroleum Exporting Countries (OPEC) and other suppliers to curb supply.
The minutes of the Fed meeting stated that if “information becomes available indicating insufficient progress toward achieving the Committee’s inflation objectives,” members will consider further tightening monetary policy. Policymakers also agreed that policy should remain restrictive for some time until inflation falls clearly and sustainably toward the Committee’s objective.
The U.S. dollar index ) struggled to extend its gains, hovering around 103.50 at press time. The U.S. dollar (USD) continues to face challenges despite a rise in U.S. Treasury yields on Wednesday. As of press time, the 10-year U.S. Treasury yield and the 2-year U.S. Treasury yield had risen to 4.41% and 4.88% respectively.
Investors are awaiting U.S. data on Wednesday, including U.S. initial jobless claims last week and a Michigan consumer confidence survey. In Canada, Bank of Canada Governor Tiff Macklem will speak at the St. John’s Regional Chamber of Commerce.
