USD/CAD flatlines around 1.4100 with the Greenback losing momentum
The US Dollar consolidates below 1.4100 against the Loonie, after rejection at the 1.4130 area.
A mild risk appetite and higher hopes of Fed easing are weighing on the USD on Monday.
Canadian Dollar rallies remain limited, as Oil prices extend their decline.
The US Dollar is trading flat, around the 1.4100 level against the Canadian Dollar, after failing to break above 1.4130 on Friday. The pair is looking for direction on a doleful trading session on Monday, weighed down by a mild appetite for risk.
The Greenback was hit on Friday by the dovish comments of New York Federal Reserve (Fed) President, John Williams, who renewed hopes of further monetary easing in the coming months. Williams said that the bank has room to cut interest rates further without putting the bank’s inflation targets at risk, which boosted market sentiment on Friday and sent the US Doillar lower accorss teh board.
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Williams' comments offset the impact of fairly positive US business activity figures and the improving Michigan Consumer Sentiment Survey released later on the day.
The odds for a quarter-point rate cut after the Fed’s December 10 meeting have increased to 75%, following Williams’ comments, from around 40% one week ago, according to data released by the CME Group’s Fedwatch Tool. This is putting some pressure on the US Dollar on Monday, but the Greenback's downside attempts remain limited, as traders acknowledge the wide divergence within the Fed’s monetary policy committee and assume that December’s Decision will be a coin toss.
In Canada, declining Oil prices, the country’s main import, are keeping Canadian Dollar bulls in check. US and Ukrainian representatives keep working on a framework for a peace deal that might alleviate sanctions on Russian crude and boost supply at a time when a weak outlook for global demand is triggering serious concerns of an Oil glut.
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