Canadian Dollar freezes in place as Loonie fails to bounce back

• The Canadian Dollar found little room to move on Wednesday.
• The Loonie is grappling with the latest inflation data out of Canada.
• Central bank policy statements and US data to drive markets through the rest of the week.

The Canadian Dollar (CAD) is struggling to find momentum heading through the midweek. The Loonie took a fresh hit after Canadian Consumer Price Index (CPI) inflation eased slightly, but otherwise gave no clear direction for the Bank of Canada (BoC) to operate with.

The remainder of the trading week will be fully focused on US economic data and Fed policymaker speeches. US Purchasing Managers Index (PMI) survey results for August will be released on Thursday, and the annual Jackson Hole Economic Symposium also kicks off on the same day. However, investors will be looking ahead to Federal Reserve (Fed) Chair Jerome Powell's appearance at Jackson Hole on Friday.

Daily digest market movers: Canadian Dollar treads water after Loonie traders left nonplussed by key Canadian data

• The Canadian Dollar remains stuck near familiar levels as Loonie momentum runs out of gas.
• Defensive CAD positioning is holding the Loonie in place against the US Dollar for now.
• The latest Fed Meeting Minutes revealed Fed policymakers may not be as close to rate cuts as many are hoping.
• Despite the surprisingly hawkish tilt to the last Fed meeting, the minutes do pre-date the last round of sour US hiring data, muting any immediate impact from hawkish overtones.
• US PMI data due on Thursday is expected to show a further tempering of business operator sentiment.

USD/CAD price forecast

USD/CAD got pushed back into multi-week highs, and the pair is now poised to close higher for the second week in a row if CAD weakness holds through the end of the week. USD/CAD is inching back toward the 200-day Exponential Moving Average (EMA) near 1.3880, which should provide significant technical resistance for bidders to contend with.

USD/CAD daily chart