USD/CAD is treading water close to the 1.40 mark as traders await rate announcements from the Bank of Canada and the US Federal Reserve. Economists point to narrowing cross-border yield gaps and growing odds of a BoC hike as the main forces at play.
The US Federal Reserve's policy committee began a two-day meeting, with traders pricing in a near-90% chance of no change to interest rates, according to CME's FedWatch tool.
The four-week average pace of US private-sector job additions eased to 16.75K through October 10, down from 17.50K previously, according to the ADP National Employment Report's weekly companion series. The reading points to a continued cooling in hiring momentum ahead of the Fed's next policy meeting.
The yen weakened broadly on Tuesday, with USD/JPY rising about 0.22% to near 157.80, as traders await back-to-back central bank decisions from the Federal Reserve and the Bank of Japan this week.
Gold (XAU/USD) stayed under pressure near the $4,000 mark on Tuesday as a broadly stronger US Dollar weighed on the metal ahead of Wednesday's Federal Reserve policy decision.
Goldman Sachs economists calculate that the worldwide rush to build AI infrastructure will drive US core PCE inflation as much as 50 basis points higher at its peak, with the boost unwinding over the course of 2027.
AUD/USD slipped 0.24% to around 0.7015 on Monday after touching a one-month high, as traders braced for Australian inflation data on Wednesday and the Fed's rate decision the same day.
TD Securities forecasts September core PCE inflation at 3.1% year-on-year and Q3 US GDP growth at 2.5% annualized, pointing to persistent price pressure alongside still-solid economic activity.
The US Dollar Index rose 0.24% to around 101.98 on Monday as investors positioned for rate decisions from five G10 central banks, including a Fed meeting on Wednesday widely expected to hold rates.
WTI crude oil has pulled back from a five-month high of $103.28 to near $100 a barrel as traders turn cautious ahead of a week of central bank meetings.