USD/CAD extends downside below 1.3450 as traders raise bets on more Fed's jumbo rate cut

• USD/CAD loses momentum around 1.3430 in Wednesday's early Asian session. 
• The CB's Consumer Confidence Index came in at 98.7 in September vs. 105.6 prior. 
• BoC's Macklem said the timing and pace of rate cuts will be dependent on data.

The USD/CAD pair remains under selling pressure near 1.3430 during the early Asian session on Wednesday. The Greenback edges lower as traders raise their bets on an additional 50 basis points (bps) jumbo rate cut from the US Federal Reserve (Fed) in November. Fed Governor Adriana Kugler is set to speak later on Wednesday. 

The US consumer confidence unexpectedly fell by the most in three years in September amid concerns about the softening labor market and slow economic growth. The Consumer Confidence Index fell to 98.7 in September from a revised 105.6 in August, the biggest drop since August 2021, the Conference Board reported on Tuesday. 

The downbeat report has triggered expectations of further rate reductions from the Fed in November, which continue to underline the US Dollar (USD) broadly. Traders are now pricing in nearly 56% odds of a second 50 bps rate cut in the November meeting, while the chance of 25 bps stands at 44%, according to the CME FedWatch Tool. 

On the Loonie front, Bank of Canada (BoC) Governor Tiff Macklem said on Tuesday that the central bank will continue to carefully watch consumer conditions in Canada, emphasizing that the timing and pace of BoC's rate cuts will be dependent on data. "The timing and pace will be determined by incoming data and our assessment of what those data mean for future inflation," noted Macklem. The BoC's next interest rate decision is scheduled for October 23, and the money markets see over 58% of 50 bps rate cuts. Another 25 bps cut is priced in for its last meeting of the year in December.