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The USD/CAD pair posts a fresh four-year high near the round-level resistance of 1.4200 in Tuesday’s European session. The Loonie pair strengthens as the US Dollar (USD) rises ahead of the United States (US) Consumer Price Index (CPI) data for November, which will be published on Wednesday. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, refreshes a two-day high at 106.35.The inflation data is expected to influence market expectations for the Federal Reserve’s (Fed) likely interest rate action in the policy meeting on December 18. The Fed is highly anticipated to cut its key borrowing rates by 25 basis points (bps) to 4.25%-4.50% next week, according to the CME FedWatch tool.Economists expect the annual headline inflation to have accelerated to 2.7% from the October reading of 2.6%. In the same period, the core CPI – which excludes volatile food and energy prices – is expected to have risen steadily by 3.3%. Month-on-month headline and core CPI are estimated to have grown steadily by 0.2% and 0.3%, respectively.Signs of cooling price pressures would accelerate Fed dovish bets for policy meeting next week. On the contrary, hot inflationary pressures would weaken them.Meanwhile, the outlook of the Canadian Dollar (CAD) remains weak as investors expect the Bank of Canada (BoC) to cut interest rates again by 50 basis points (bps) to 3.25% in the monetary policy meeting on Wednesday.Significantly lower Unemployment Rate and price pressures remaining contained within bank’s target of 2% have led to dovish BoC bets.More By This Author:Silver Price Forecast: XAG/USD Posts Fresh Four-week High $31.50 As Fed Dovish Bets Soar AUD/USD Price Forecast: Bullish Reversal Move Looks Likely USD/CAD Surges To Near 1.4100 After US-Canada Employment Data
