USD/CAD continues to rise, as economic data from Canada show weakness.
Reportedly, retail sales in August dropped by 0.1% compared to July, and will likely remain at the same level in September, indicating a slowdown in the domestic economy. This reinforces the expectations that the Bank of Canada will leave the interest rate unchanged, a decision that will be announced this Wednesday. Analysts see a 43% chance of a rate hike at the meeting on October 25.
In addition, Adam Button, Chief Currency Analyst at ForexLive, said the Bank of Canada will not want to exacerbate concerns about housing affordability, but it will be forced to shoulder the burden of mortgage expenses that Canadians currently face. Canada may be particularly sensitive to rising borrowing costs right now, and the increase in global yields significantly complicates the Bank of Canada's work.
In terms of oil prices, they continue to rise due to concerns about disruptions in global supplies amid the risk of escalating geopolitical tensions in the Middle East.