• USD/CAD has gauged buying interest after dropping below 1.3430 amid a recovery in the USD Index.
• Hawkish Federal Reserve bets despite cooling US Inflation have provided a cushion to the US Dollar.
• Bank of Canada Governor kept policy rates steady at 4.5% citing that the current monetary policy is restrictive enough to tame sticky inflation.
• USD/CAD is declining towards the horizontal resistance plotted from April 04 low at 1.3406.

The USD/CAD pair has sensed buying interest after defending the crucial support of 1.3430 in the early European session. The Loonie asset is looking to extend its recovery above the immediate resistance of 1.3437. The major has grabbed the attention of responsive buyers after a recovery move in the US Dollar Index (DXY). The USD Index has rebounded after building a firm base around weekly lows at 101.44 as hawkish Federal Reserve (Fed) bets are full of strength despite softening of United States inflation as expected by the market participants.

S&P500 futures have turned positive after negating bearish cues inspired by renewed fears of the US recession, portraying a recovery in the risk appetite of the market participants. US equities faces pressure on Wednesday and settled weak after Federal Open Market Committee (FOMC) minutes confirmed that the economy will face a mild recession later this year. It is highly likely that tight credit conditions by US commercial banks after the banking collapse and higher rates from the Federal Reserve will push the economy into recession.

Meanwhile, the demand for US Treasury bonds has improved on expectations that a slowdown in the US economy would force the Federal Reserve to consider rate cuts later. The yields offered on 10-year US Treasury bonds have slipped to near 3.41%.