USDCAD Canadian Dollar Rises Despite US Fed Minutes Suggesting September Rate Hike

The Canadian dollar rose 0.29 percent on Wednesday against the US dollar. The USD/CAD is trading at 1.2996 after the U.S. Federal Reserve published the minutes from its August Federal Open Market Committee (FOMC) meeting. The US central bank did not tweak its monetary policy at that time, but the notes from members continue to point to two more rate hikes in 2018. The first one likely coming in September.

Comments from Fed members on the possible slowdown of the US economy in the second quarter of the year and the risk for trade disputes to hurt business investment put more downward pressure on the greenback.

The loonie is near two week highs as the softness of the USD combined with rising optimism on a quick resolution to the NAFTA renegotiation. The disappointing retail sales data did not make a strong impression on the market, as the political turmoil in Washington was the main focus of investors.

The market continues to price in a rate lift by the Bank of Canada (BoC) in the fall as the central bank is expected to keep up with the Fed.

Oil prices rose as earlier today the Energy Information Administration (EIA) published the weekly US crude inventories. A larger than expected drawdown of 5.2 million barrels boosted West Texas Intermediate prices to $68.53 recouping the losses from last week when inventories showed an unexpected large buildup.

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