USD/CAD grapples to hold ground after rebounding from a five-month low of 1.3498, recorded on Monday.
The US Dollar depreciated due to Fed Chair Powell’s dovish speech at the Jackson Hole Symposium.
The commodity-linked CAD may advance further due to the higher crude Oil prices.
USD/CAD rebounds from its five-month low of 1.3498, recorded on Monday, currently hovering around 1.3510 during the early European session on Monday. This upside could be attributed to the improved US Dollar (USD) amid increased risk aversion. However, the Greenback may receive downward pressure from the rising odds of a Federal Reserve (Fed) rate cut in September.
Fed is highly expected to deliver atleast a 25-basis point rate cut in September. According to the CME FedWatch Tool, markets are now fully anticipating at least a quarter-basis point (bps) rate cut by the Federal Reserve at its September meeting.
At the Jackson Hole Symposium on Friday, Fed Chairman Jerome Powell remarked, "The time has come for policy to adjust." While he did not provide specific details on the timing or scale of potential rate cuts, Powell highlighted that risks in the job market have risen, whereas inflation risks have diminished.
The commodity-linked Canadian Dollar (CAD) received support from the higher crude Oil prices. West Texas Intermediate (WTI) price extends its gains for the third consecutive day, trading around $75.20 per barrel at the time of writing. Crude Oil prices appreciate due to rising supply fears over geopolitical tensions in the Middle East.
