USD/CAD Falls to 1.4350 as Soft US Inflation Weakens Dollar
USD/CAD dropped 0.4% to 1.4350 as softer-than-expected US CPI data weighed heavily on the greenback. November's inflation reading of 2.7% year-on-year marked the lowest pace since 2021, reinforcing expectations for Federal Reserve rate cuts in early 2024. The Canadian dollar gained despite mixed domestic data, with oil prices holding steady near $71/barrel providing additional support. Technical analysis shows the pair breaking below the 50-day moving average at 1.4380, opening the path toward 1.4300 support. Resistance now sits at 1.4400-1.4420. The bearish momentum could accelerate if upcoming US retail sales disappoint. Bank of Canada officials remain hawkish, creating policy divergence that favors CAD strength. Traders should monitor oil price movements and Friday's Canadian retail sales for near-term direction.
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