Canadian Dollar climbs into higher ground as markets move out of the way

• The Canadian Dollar gained ground on Tuesday as markets pivot out of Greenback.
• Bank of Canada Governor Macklem reaffirmed BoC's stance.
• Markets are churning on rising Fed rate cut expectations.

The Canadian Dollar (CAD) gained ground on Tuesday, testing multi-month highs against the softening Greenback. Markets are pivoting into a USD-short stance on rising expectations of future Fed rate cuts, helping to give the CAD a leg up.

Canada remains largely absent from the economic calendar this week, but an appearance from Bank of Canada (BoC) Governor Tiff Macklem helped to provide a springboard for the Canadian Dollar by reminding markets that the BoC is committed to carefully observing deteriorating market conditions and giving a casual head-nod to credit-crunched Canadians.

Daily digest market movers

• The Canadian Dollar rose seven-tenths of one percent against the Greenback on Tuesday, and is testing multi-month highs.
• US consumer confidence slumped into the low side, and US consumers continue to see accelerating inflation looking out over the next 12 months.
• Despite the uptick in consumer inflation expectations, markets have piled into bets of a follow-up 50 bps rate cut from the Federal Reserve (Fed) in November.
• BoC's Macklem: Bank of Canada is pleased to see inflation at 2%, now we need to stick the landing.
• More Macklem: There is a notable increase in financial stress among borrowers without a mortgage, mainly renters.

Canadian Dollar price forecast

The Greenback's Tuesday pullback has given the Canadian Dollar a chance to regain ground, sending the USD/CAD pair down into 1.3440. The pair has tested a fresh six-month low, and bidders have been pushed back after a technical rejection from the 200-day Exponential Moving Average (EMA) near the 1.3600 handle.

Canadian Dollar daily chart