USD/CAD consolidates losses near 1.4000, awaiting US reopening

• The Dollar finds support at 1.4000 against the Loonie but remains capped below 1.4020.
• Investors remain wary of risk, awaiting the US congressional vote on the Government funding bill.
• The Greenback sold off in previous days as Canadian employment curbed hopes of further BoC easing.

 The US Dollar halted its sell-off against its Canadian counterpart on Wednesday, with bears capped above the 1.4000 psychological level, following a 0.7% decline in the previous three trading days. Upside attempts, however, remain capped below 1.4020 for now.

Market volatility remains subdued on Wednesday, with investors wary of taking excessive risks, as they await the vote in the US Congress that would ratify the bill to end the largest US Government shutdown in history. Such an outcome would allow for the release of a slew of delayed reports that are expected to provide a more accurate picture of the US economic outlook and the Federal Reserve rate path.

Dwindling hopes of BoC cuts boost the CAD

The Greenback lost ground earlier this week due to a combination of strong Canadian employment figures and some hawkish comments from the Bank of Canada (BoC), which have diminished expectations for further monetary easing in the near term. Beyond that, a recovery in Crude prices completed the US Dollar's bearish picture.

In the US, the downbeat private employment data seen on Tuesday increased concerns about the deterioration of the US labour market and heightened hopes that the Fed will be forced to prioritize employment over inflation, and cut rates for the third consecutive time in December.

Later in the day, a batch of Fed officials is expected to provide further clues about next month's monetary policy decision. In Canada, the focus will be on the Summary of Opinions of the BoC's last Governing Council, which might have some impact on the Canadian Dollar's volatility.