USD slides ahead of Fed Chair’s testimony

Friday’s US employment data was very much in line with expectations although the pace of average wage price rises slowed slightly. That appears to be all the incentive the markets needed to sell some US dollars, although the GBP/USD rate is still within recent ranges at $1.2665 and the EUR/USD is similarly rangebound at $1.0840. This week’s big news will be the testimony delivered by the Federal Reserve Chairman, Jerome Powell, to Congress. What everybody in the markets wants to hear, is some clue as to the timing and pace of any US interest rate cuts. As with all central banks, it looks as though we are at the top of the cycle and lower interest rates are due to arrive sometime soon.

CAD weaker ahead of rate decision

The GBP/CAD rate is on the rise this morning ahead of this week’s Bank of Canada interest rate decision. There is extra pressure on the Bank of Canada to reduce the cost of borrowing after Friday’s data showed the unemployment rate rose from 5.7% to 5.8% in February, equalling the highest level since January 2022. GBP/CAD is testing CAD 1.72 this morning. Traders are contemplating whether this currency pair will breach 1.72 before Wednesday’s BOC announcement.